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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Haines v. Cox (05/16/2008) sp-6261

Haines v. Cox (05/16/2008) sp-6261, 182 P3d 1140

     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


KELLI HAINES, )
) Supreme Court No. S- 12386
Appellant, )
) Superior Court No. 3HO-03-174 CI
v. )
) O P I N I O N
JOHN L. COX, )
) No. 6261 May 16, 2008
Appellee. )
)

          Appeal  from the Superior Court of the  State
          of  Alaska,  Third Judicial District,  Homer,
          Margaret L. Murphy, Judge pro tem.

          Appearances:  Carol A. Brenckle,  Kenai,  for
          Appellant.

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

          EASTAUGH, Justice.

I.   INTRODUCTION
          This  appeal concerns property division issues in Kelli
Haines and John Coxs divorce following trial.  Haines argues that
the  trial  court  erroneously failed  to  consider  a  2006  tax
assessment when it valued the marital home.  She also argues that
it was error not to credit her with half the rental value for the
marital  home while Cox lived in it after separation and  not  to
credit her with half the marital home property insurance premiums
she  paid  before trial.  Because Haines first offered  the  2006
assessment when she sought reconsideration, she did not offer  it
in  a  timely  manner.   We  therefore affirm  the  trial  courts
valuation.   But  because  it was legal  error  not  to  consider
whether  to credit Haines with half the rental value or half  her
insurance expense, we remand for consideration of those claims.
II.  FACTS AND PROCEEDINGS
          Kelli  Haines  and John Cox married in  June  1999  and
separated  in May 2003.  During their marriage they  lived  in  a
Homer  house built during the marriage on land Cox had  purchased
before  the marriage.  After separation Cox continued  living  in
the  home  and Haines moved out, but Haines paid the 2003,  2004,
and  2005  property taxes and the property insurance premiums  to
insure the marital home for 2003, 2004, and 2005; it appears  she
paid the first premium in October 2002.1
          The  divorce trial was held October 7, 2005.  The  only
contested issue was how to value and divide the marital property.
The  home  was the only marital property remaining to be divided.
In  determining the homes value, the trial court considered three
different   valuations.   Haines  offered   the   testimony   and
comparative  market analysis of a real estate broker  who  valued
the  property  at  $135,000 to $145,000.  This  valuation,  dated
August  25, 2005, was based on the brokers view of the  land  and
the  homes  exterior.   Cox submitted an opinion  of  value  from
another broker, who estimated the value at $95,000 to $98,000  as
of  March 25, 2005.2  This opinion was based on viewing the  home
inside  and  out.   The third valuation was the  Kenai  Peninsula
Boroughs  2005 tax assessment as of January 1, 2005.   It  stated
that the assessed value was $119,200.
            The  trial courts April 20, 2006 memorandum  decision
and  order   contained its post-trial rulings. It found  the  tax
assessment   was  the  most  reliable  of  the  three   proffered
valuations because it was not prepared for either party  and  was
not  done for the divorce trial and further was done by a neutral
party  with a mandated obligation to assess the property  at  the
fair  market value.  The court found the homes value was $119,200
at the time of trial.
          After considering the Merrill factors,3 the court found
that  the circumstances of the parties were very similar and that
their economic situations were approximately the same.  The court
concluded  that  an equal division of the value  of  the  marital
residence  was appropriate and awarded Haines $61,566.98  as  her
share of the marital residence.4
          Haines filed a motion for reconsideration in late April
2006  arguing,  among  other things, that  the  courts  valuation
erroneously  relied  on the outdated 2005  tax  assessment;  that
Haines should be awarded half the homes fair rental value because
Cox  had lived in the house rent free after separation; that  the
court  should  reconsider  its  decision  to  require  Haines  to
transfer  the  property to Cox before she received  payment;  and
that  the  court failed to credit Haines for half  the  insurance
premiums  she paid for the years 2003, 2004, and 2005 to preserve
the marital asset.5  The motion attached the 2006 tax assessment.
The trial court denied the reconsideration motion.
          Haines appeals.6
III.      DISCUSSION
     A.   Standard of Review

          The  valuation  of  available  property  is  a  factual
          determination that should be reversed only if clearly erroneous.7
We review the equitable allocation of property under the abuse of
discretion standard; we will not reverse an allocation unless  it
is   clearly  unjust.8   Although  we  review  for  an  abuse  of
discretion whether to grant credit for rental value and  expenses
to  preserve  the marital property,9 in this case we  review  for
legal error Hainess contention that the trial court simply failed
to exercise its discretion.10
     B.   The  Valuation of the Marital Property Was Not  Clearly
          Erroneous.
          
          Hainess  reconsideration motion argued that  the  trial
court  incorrectly valued the marital property by relying  on  an
outdated  2005 tax assessment.  In support of her reconsideration
motion,  Haines  submitted the 2006 Kenai Peninsula  Borough  tax
assessment  valuing  the home at $137,800;  this  assessment  was
dated  January  1, 2006.  The 2006 assessment was not  previously
provided to the trial court.
          On  appeal  Haines argues that the 2006  assessment  is
similar to her brokers trial testimony, which valued the house at
$135,000 to $145,000 as of August 25, 2005.  Haines asserts  that
although  the  2006 tax assessment is dated almost  three  months
after  trial  ended, the trial court did not issue  its  decision
until April 20, 2006, three and a half months after the effective
date  of the 2006 assessment.  Haines points out that her brokers
analysis  was  made closer to the trial date than  the  2005  tax
assessment.   Haines  argues that the trial courts  decision  was
incorrect  and  that, because the current value of  the  home  is
higher  than  the  value the court used for  division,  Cox  will
effectively  receive $18,600 more than Haines.  Haines  concludes
that  the  trial court should have valued the home based  on  the
2006 assessment or her brokers market analysis.
          There are two potential problems with Hainess argument.
The first is substantive and the second is procedural.
          The  date  on  which a trial court values  the  marital
property should be as close as possible to the date of trial, but
in  special circumstances the court may value property as of  the
date the parties separated.11  Absent special findings justifying
use  of  the  separation date, the trial court should  value  the
marital property as of a time as close as practicable to the date
of  trial.12  Haines implies that because the 2006 assessment  is
similar to her brokers analysis, the brokers analysis was a  more
accurate  assessment  of  the value of the  home  than  the  2005
assessment  relied on by the court.  If Haines had presented  the
2006  assessment  to the trial court in a timely  manner  with  a
request  to  reopen the evidence, the court could have determined
whether it was relevant to the valuation of the home at the  time
of  trial, and the parties could have disputed whether  the  2006
assessment  reflected the value as of the  date  of  trial.   But
because Haines did not submit the 2006 assessment until she moved
for  reconsideration,  we do not have to  determine  whether  the
trial  court should have considered the 2006 assessment  relevant
to  its valuation of the home.  Instead, our decision here  turns
on the timeliness of Hainess request.
          Assuming that the 2006 assessment was relevant  to  the
issue  of valuation, Hainess arguments are nonetheless unavailing
because  she did not raise them in a timely manner.  She did  not
submit  the  2006 tax assessment or ask the court to rely  on  it
until  after  the court had issued its decision  in  April  2006.
Submitting  the January 2006 assessment only when she  moved  for
reconsideration in late April 2006 forecloses her claim that  the
court  abused  its  discretion by failing to  rely  on  the  2006
assessment.13
          Haines  alternatively argues that we should  order  the
marital  home sold and the proceeds divided equally to  give  Cox
the  opportunity to purchase the home for fair market value.  She
asserts that the trial court erroneously concluded that the  only
reason Haines wanted the home sold was to force Cox to move  out.
Haines  implies that the trial court incorrectly valued the  home
and  argues  that selling the home is, and was, the best  way  to
determine its value.  The trial courts decision to value the home
based  on the 2005 tax assessment after considering the differing
opinions  of  the  parties brokers was within  its  discretion.14
Haines  points  to no evidence justifying a conclusion  that  the
trial  court  clearly erred in valuing the home.  And  given  the
adequate, if disputed, evidence of the homes value, there  is  no
basis  for  thinking  the  court abused  its  discretion  in  not
ordering the home sold to establish fair market value.
     C.   It  Was  Error Not To Consider Whether To Grant  Haines
          Credit for Half the Fair Rental Value.
          
          Haines argues that the trial court erred by failing  to
award  her half of the fair rental value of the marital home  and
that  the trial court misinterpreted Wood v. Collins15 in denying
her reconsideration motion.
          Haines  asked at trial and again in her reconsideration
motion  that she be credited with half the fair rental  value  of
the marital home because Cox remained in the home rent free after
the  parties separated in May 2003.  She estimated that the  fair
rental  value  was  about  $850 per month  during  the  pertinent
period.   On  appeal  she raises other arguments  supporting  her
assertion  that  it would have been equitable to award  her  this
credit,  and  argues  that  Cox  forced  her  to  move  from  the
residence.
          In  denying  Hainess reconsideration motion  the  trial
court  concluded that Wood does not apply to cases involving  the
division  of  the  value of a marital home.   The  court  further
stated  that  Haines  had not provided any legal  authority  that
would allow her to receive half the rental value.
          The  trial court correctly concluded that Wood does not
apply  to marital cases.16  But that does not mean that  a  trial
court  is  altogether foreclosed from considering  whether  there
should  be  an adjustment for fair rental value for  the  marital
home.
          Korn v. Korn states the proper rule in divorce cases.17
Per  Korn, the issue is addressed to the trial courts discretion;
the  trial court may award rental value but only as an adjustment
to  the  equitable division of assets in the third  step  of  the
          property-division process, if it provides a careful explanation.18
Applying Korn, we have held that it is not an abuse of discretion
to treat for property division purposes a husbands exclusive post-
separation  occupancy  of  the marital  residence  as  though  he
received rent from the marital estate.19
          Here  the  court  erroneously  concluded  that  it  was
legally  foreclosed from deciding whether to grant the  requested
credit.   This legal error requires remand.  This does  not  mean
that  as  a  matter of law Haines is entitled to an offset.   But
given  the  evidence, it does mean that on remand the court  must
exercise  its  discretion in considering whether  to  adjust  the
equitable  division of assets by half the rental value.   If  the
court takes the rental value into account, it should make written
findings on the issue.
     D.   It  Was  Error Not To Consider Whether To Credit Haines
          for  Half  the  Cost  She Paid To  Insure  the  Marital
          Property.
          
          Haines  next argues that it was error not to award  her
half  the  cost  of  the premiums she paid to  insure,  and  thus
preserve, the marital residence for 2003, 2004, and 2005.   There
was  undisputed  trial  evidence that Haines  paid  the  property
insurance  premiums for three years beginning with a  payment  in
October 2002.
          Haines  raised  this  argument  at  trial  and  in  her
reconsideration motion.  The trial court did not discuss  Hainess
request in its April 20 order, and addressed the argument for the
first time in its order rejecting Hainess reconsideration motion:
          Although  Haines testified that she had  paid
          the  insurance on the property, she  did  not
          provide  any evidence that Cox was  or  would
          have  been  a  beneficiary of the  insurance.
          Since Haines would have been the only one  to
          benefit if a claim had been filed, she cannot
          now  ask  to  be reimbursed for one-half  the
          cost  of  the  insurance since no  claim  was
          filed.
          
          On  appeal, Haines argues that no evidence supports the
courts  reasoning.  She contends that [h]ad there been  a  claim,
and  the property destroyed, . . . Cox would have had a cause  of
action  against [her] for his share of the proceeds.  She reasons
that  his  cause of action would have been based on a failure  to
take  steps to preserve the marital asset if the house had burned
down and she had not purchased insurance.
          The home remained a marital asset following separation.
Haines  incurred  expense to preserve or  protect  it  by  buying
insurance that would have replaced or repaired it in the event of
loss.   As  Haines argues, there was no evidence  supporting  the
notion  that Cox would have recovered nothing under the insurance
policy  or  that  the  expense did not benefit  both  parties  by
protecting the main marital asset.  It was therefore error not to
consider  whether  the credit should be given.   We  consequently
remand as to this issue.20  The superior court should determine on
          remand whether Haines is entitled to a credit for half the cost
of the insurance premiums for the marital home.21
IV.  CONCLUSION
          The valuation of the marital property is AFFIRMED.  The
denials of credits for half the rental value and half the cost of
insurance   are  VACATED.   We  REMAND  for  further  proceedings
consistent with this opinion.
_______________________________
     1     As  of  October 2005, the 2005 property taxes had  not
been paid.  The court ordered Cox to pay the 2005 taxes; when  he
did not, Haines paid them.

     2     This  brokers  original estimate valued  the  home  at
$90,000 as of February 2004.

     3    Merrill v. Merrill, 368 P.2d 546, 547 n.4 (Alaska 1962)
(discussing factors now codified in AS 25.24.160(a)(4)).

     4     The court stated that this amount represents the total
of Hainess half of the value of the residence plus half the 2003,
2004, and 2005 property taxes, to reimburse Haines for Coxs  half
of the property taxes Haines had paid since separation.

     5    The supporting memorandum also asserted that the courts
April  20,  2006 decision was issued more than six  months  after
trial  ended on October 7, 2005.  The October 7 log notes reflect
that  the  court dissolved the marriage as of that date and  took
property division under advisement.

     6    Cox has not filed a brief.

     7    Cox v. Cox, 882 P.2d 909, 913-14 (Alaska 1994).

     8    Id. at 914 (internal quotations omitted).

     9     Berry  v.  Berry,  978 P.2d 93, 95 (Alaska  1999)  (We
review for abuse of discretion a superior courts decision whether
to  give  a  credit  to a spouse for payments  made  to  maintain
marital  property.); see also Martin v. Martin, 52 P.3d 724,  726
(Alaska 2002) (noting equitable allocation step is reviewed under
abuse  of  discretion standard); cf. Korn v. Korn, 46 P.3d  1021,
1024  (Alaska 2002) (noting allowances for rental value are  made
in equitable-division step of property division process).

     10       Whether   the  trial  court  erred   by   allegedly
misconceiving the scope of its discretion or thought that it  had
no discretion to decide a dispute is a legal question. See Garner
v.  State, Dept of Health & Soc. Servs., Div. of Med. Assistance,
63  P.3d  264, 269 (Alaska 2003) (stating that it is legal  error
for  an  agency  to  fail to apply exceptions found  in  its  own
regulations,  or . . . to inquire into their applicability);  see
also  Cano  v.  Municipality of Anchorage, 627 P.2d  660,  663-64
(Alaska  App. 1981) (stating that failure to exercise  discretion
is legal error).

     11    Ogard v. Ogard, 808 P.2d 815, 819-20 (Alaska 1991); see
also  Walker v. Walker, 151 P.3d 444, 448 (Alaska 2007)  (stating
valuation date should be as close as practicable to date of trial
unless  special  circumstances justify  valuing  property  as  of
separation date).

     12    Walker, 151 P.3d at 448.

     13    See Stadnicky v. Southpark Terrace Homeowners Assn, 939
P.2d  403, 405 (Alaska 1997) (An issue raised for the first  time
in  a motion for reconsideration is not timely. (citing Miller v.
Miller, 890 P.2d 574, 576 n.2 (Alaska 1995))); see also Koller v.
Reft,  71  P.3d 800, 805 n.10 (Alaska 2003) (noting that superior
court   is  under  no  obligation  to  consider  documents  first
presented with motions for reconsideration).

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

     15    Wood v. Collins, 812 P.2d 951 (Alaska 1991).

     16    We have held that Wood does not apply to marital cases
stating,  Wood  did  not  involve marital  property  because  the
parties  were  not  married.  . . . [Therefore,]  Wood  does  not
require  a  trial  court  to apply these rules  of  cotenancy  to
married  parties seeking a divorce.  Dodson v. Dodson,  955  P.2d
902, 912 n.17 (Alaska 1998).

     17    Korn v. Korn, 46 P.3d 1021 (Alaska 2002).

     18    Id. at 1024 ([A]ny allowance for [imputed rental value]
in  the  property decision [is] reflected in the  third  step  of
property-division  process   as an adjustment  to  the  equitable
division of marital assets that actually existed.).

     19     Carr  v.  Carr,  152 P.3d 450, 454-55  (Alaska  2007)
(citing Korn, 46 P.3d at 1023-24).

     20    Haines seeks a credit for the premiums she paid for the
years  2003,  2004, and 2005.  The log notes of her untranscribed
testimony imply that she paid the premium for 2003 in late  2002.
We  note  as  to this payment that the parties did  not  separate
until May 2003.

     21     Ramsey  v.  Ramsey, 834 P.2d 807, 809  (Alaska  1992)
([T]he  fact  that  one party has made payments from  non-marital
income  to preserve marital property should be considered as  one
of the circumstances to be weighed by the trial court in dividing
the marital property.).

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