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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Pfeil v. Lock (10/25/2013) sp-6836

Pfeil v. Lock (10/25/2013) sp-6836, 311 P3d 649

         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, email  

                                                                                        

         corrections@appellate.courts.state.ak.us.  



                    THE SUPREME COURT OF THE STATE OF ALASKA  



AARON PFEIL,                                                 )  

                                                             )    Supreme Court No. S-14798  

                            Appellant,                       )  

                                                             )    Superior Court No. 3AN-11-08760 CI  

         v.                                                  )  

                                                             )    O P I N I O N  

CHACHEE LOCK,                                                )  

f/k/a CHACHEE PFEIL,                                         )    No. 6836 - October 25, 2013  

                                                             )  

                            Appellee.                        )  

                                                             )  



                   Appeal from the Superior Court of the State of Alaska, Third  

                                                                                     

                   Judicial District, Anchorage, Frank A. Pfiffner, Judge.  



                   Appearances:    J├╝rgen  Jensen,  The  Law  Office  of  J├╝rgen  

                                                                

                   Jensen,  Anchorage,  for  Appellant.                  Mario  Lincoln  Bird,  

                                                                          

                   Anchorage,  for Appellee.  



                   Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  

                               

                   Bolger, Justices.  



                   WINFREE, Justice.  



I.       INTRODUCTION  



                   A couple initiated divorce proceedings after two years of marriage.  Noting  

                                                                                                                 



the  marriage's  short  duration,  the  wife  requested  that  the  superior  court  "return  the  

                                                                                



parties as much as possible into their pre-marital financial status" and sought a property  

                                                     


----------------------- Page 2-----------------------

                                          1  

                                                    

division under Rose v. Rose .   The husband requested that the superior court "equitably  

divide all marital property."2  



                             

                    After a one-day trial the superior court granted a divorce decree and divided  



                                           

marital property based on a determination that the "parties are asking the court to apply  



                  

a modified version of Rose ."  The superior court divided all of the property, based partly  



              

on Rose  and  partly  on  equitable  division.    The  husband  moved  for  reconsideration,  



                          

arguing that the superior court had ignored his request for equitable distribution of all  



                                       

marital property and that the resulting distribution was inequitable.  The superior court  



denied the reconsideration motion without explanation.  The husband appeals.   



                                                                                                       

                    Because the superior court's decision was (1) based on the faulty premise  



                                                                                         

that both parties agreed to a Rose property division and (2) not otherwise supported by  



necessary factual findings, we reverse and remand for a new property division.  



II.       FACTS AND PROCEEDINGS  



          A.        Facts  



                    Aaron  Pfeil  and  Chachee  Lock  began  dating  in  2005  or  2006,  became  



          1         755 P.2d 1121, 1125 (Alaska 1988), holding that:  



                    [I]n  marriages  of  short  duration,  where  there  has  been  no  

                    significant commingling of assets between the parties,  the  

                                                                                            

                    trial  court  may,  without  abusing  its  discretion,  treat  the  

                                              

                    property  division  as  an  action  in  the  nature  of  rescission,  

                    aimed  at  placing  the  parties  in,  as  closely  as  possible,  the  

                    financial position they would have occupied had no marriage  

                    taken place.  



          2         See Wanberg v. Wanberg, 664 P.2d 568, 570 (Alaska 1983) ("Equitable  



division of marital assets by the superior court involves a three-step procedure. First, the  

                                                                                                                     

trial court must determine what specific property is available for distribution.  Second,  

                                                                                                                    

the court must find the value of this property.  Third, it must decide how an allocation  

                                                                       

can be made most equitably.").  



                                                              -2-                                                        6836
  


----------------------- Page 3-----------------------

                                                                                                   

cohabitants sometime between December 2007 and March 2008, and married in June  



                                                        

2009.  The parties' primary disputed assets, which essentially are the sole focus of this  

appeal, are two houses, a vehicle, and a four-wheeler.3  



                    1.        Real property  



                    In December 2007 Chachee purchased a home on East 65th Avenue in  

                                                                                                                 



Anchorage (E. 65th home).  The parties dispute exactly when Aaron moved into that  

                                                              



home, but agree they were cohabitants from at least March 2008 until December 2010,  

                                                                              



when Aaron purchased a home on Langnes Court in Anchorage (Langnes home).  The  

                                                                                                



parties then used the Langnes home as their marital residence and the E. 65th home as  



a rental property.  



                                                                               

                    While they shared the E. 65th home - both before and after marriage -  



                                                                                                    

Aaron and Chachee each deposited around $1,200 monthly into a joint account.  This  



money was used to pay the mortgage and other household bills.  Both also contributed  



                                                                                                            

to home improvements.  After moving into the Langnes home they rented out the E. 65th  



home,  but  the  rental  income  was  insufficient  to  cover  all  of  that  home's  expenses.  



                                                                     

During  this  period  Aaron  paid  the  Langnes  home  mortgage  and  Chachee  paid  any  



                                                                                      

E.  65th  home  expenses  exceeding  the  rental  income.                            Chachee  also  paid  for  some  



improvements to the Langnes home.  



                                                                                                                 

                    At the time of trial the Langnes home was worth $335,000 and the E. 65th  



                                                                                                                       

home was worth $236,500.  The Langnes home mortgage was $355,864, and the E. 65th  



home mortgage was $225,055.  Thus the Langnes home had about $20,000 negative  



equity, but the E. 65th home had about $11,000 positive equity.  



          3  

                                                                                        

                    The parties had many other items of personal property, including disputed  

                                                                                                            

firearms, tax debt, a vehicle trailer, and numerous miscellaneous items.  Aaron did not  

challenge the superior court's determinations of separate versus marital property for  

those items or their valuation and division.  



                                                              -3-                                                           6836  


----------------------- Page 4-----------------------

                    2.        Vehicles  



                    In  September  2008,  during  cohabitation  but  before  marriage,  Chachee  



                                                                                                                 

purchased a Chevrolet Silverado Duramax pickup truck (the Duramax).  At the time of  



                                                      

divorce both parties were listed on the Duramax registration.  Both parties drove the  



Duramax during cohabitation and marriage.   Chachee made all of the payments on the            



                                                      

Duramax, and the vehicle loan was in her name.  At the time of trial the Duramax was  



worth $16,572 with slightly over $11,000 debt.  



                                                                         

                    In June 2010 Chachee gave Aaron $7,000 to purchase a Yamaha Grizzly  



                                                      

four-wheeler (the Grizzly).  Aaron subsequently reimbursed Chachee $3,500.  At the  



time of trial the Grizzly was worth $2,180.  



          B.        Proceedings  



                    Chachee  filed  for  divorce  in  June  2011,  attaching  a  property  and  debt  



                                                                                                             

worksheet. Aaron answered, partly denying Chachee's property and debt assertions and  



requesting "an equitable division of property."  



                                                                   

                    In her trial brief Chachee stated that "[t]he parties have agreed that each will  



keep  their  separate  residences  .  .  .  and  the  loans  thereon"  but  that  "the  division  of  



                                          

personal property is still in dispute."  Chachee requested the Duramax and that either  



Aaron pay her $3,500 or the court award her the Grizzly.  She also requested other  



                                          

personal property items and reimbursement for expenditures she made on improvements  



                                                        

for the Langnes home.  She asserted that "Aaron may claim that there should be some  



payment from Chachee towards equalizing the division of assets.  This is a marriage of  



                                                                         

short duration and pursuant to Rose v. Rose  . . . the court should attempt to return the  



parties as much as possible into their pre-marriage financial status."  



                                                                                                        

                    In his trial brief Aaron requested an equal division of the marital property.  



                         

Aaron  asserted  that  the  E.  65th  home  and  the  Duramax  were  transmuted  marital  



                                             

properties.  He suggested that each party retain the home they were then living in (Aaron  



                                                              -4-                                                        6836
  


----------------------- Page 5-----------------------

the Langnes home and Chachee the E. 65th home), that each party be liable for the debt  

                                                                                       



on any property  they retain (including the homes), and that he receive the Duramax and  



Grizzly.    He  concluded  with  a  request  that  the  court  "include  the  real  property  and  



property acquired during cohabitation and equitably divide all the disputed property,"  



                                                                                              

and "that Chachee pay a $13,089.42 equalizing payment to balance the marital estate."  



                                                                      

                     Trial took place in April 2012. The superior court issued its findings of fact  



                                                                                 

and conclusions of law in May.  In its discussion of property valuation and division the  



                                                                   4  

                                                                     and then, citing Rose , explained that "[t]he  

                                                                                                        

court first introduced the " Wanberg rules," 



Wanberg rules do not apply in a marriage of short duration where the parties have not  

                              



significantly commingled assets and can be put in the position that they were at the time  

                                                                                                                        



                                          5  

the marriage commenced."   The court stated:  



                     In this case, without necessarily articulating their position  

                     both parties are asking the court to apply a modified version  

                                               

                     of Rose .  In other words, the parties are asking the court to  

                                                                                      

                     identify many assets as pre-marital and award the asset and  

                     any related debt to the party who acquired the property before  

                                               

                     marriage.         The  parties  are  effectively  asking  the  court  to  

                                               

                     apply [the]  Wanberg rules with regard to disputed items of  

                                                                        

                     property. The court will adopt the methodology requested by  

                                                     

                     the   parties   and   will            make   valuation             and   distribution  

                     determinations for contested items.  



                     The  superior  court  awarded  Aaron  and  Chachee  their  respective  bank  

                                                     



account  balances,  retirement  accounts,  and  credit  card  debts.    The  court  awarded  



Chachee the E. 65th home and debt and awarded Aaron the Langnes home and debt,  

                                                                                           



explaining that it was awarding "the real property and the debt thereon in the fashion  

                                                                                                     



          4          See Wanberg, 664 P.2d at 570 (describing three-step equitable division     



process).  



          5          See Rose, 755 P.2d at 1125.  



                                                                 -5-                                                               6836  


----------------------- Page 6-----------------------

requested  by  the  parties."    The  court  awarded  Chachee  the  Duramax  "because  she  



purchased the vehicle before the marriage."  The court awarded Chachee the Grizzly,  



finding that Aaron paid Chachee half the money she lent him for the Grizzly, but "he was  



a primary user of the vehicle and essentially used up the value of his investment."  



                                                 

                    After distributing the rest of the marital property - property not disputed  



                                                                                         

on appeal -   the court concluded that the "distribution represents an approximately  



                                                    

equal distribution of the value of the parties' marital personal property" and explained  



                                                                      

that "[f]or the non-Rose distribution of part of the marital [property], this court starts out  



                                                                                                               

with the presumption that an equal division of property is most equitable. . . . In this case,  



                                                                    

an  approximate  50/50  split  of  the  marital  assets  and  debt  to  be  divided  is  fair  and  

equitable."6  



                                                                            

                    Aaron  moved  for  reconsideration,  arguing  that  the  superior  court  had  



                                     

ignored his request that "all property, real and personal, acquired during cohabitation and  



                                                                                                                       

marriage be equally divided between the parties."  He argued that the court:  (1) failed  



to realize that items purchased during cohabitation were marital property; (2) overlooked  



                                                                     

his request that "the equity in the parties' real property be allocated between the parties";  



                               

and  (3)  distributed  the  marital  estate  inequitably.    Aaron  stated  that  "Chachee  was  



                                                           

awarded the majority of the items that retained any value.  Aaron on the other hand, was  



          6         The superior court did not value all of the property it divided.  The court  



explained:  



                    The parties have listed values for the personal items set forth  

                                                                              

                     . . . based on their opinions of value.   Suffice it to say that  

                                                                                 

                    these valuations are guesses at best. The court concludes that  

                                                                            

                    the  overall  value  of  the  marital  personal  property  items  

                                                                                         

                    awarded  to  each  party  is  approximately  equal  and  no  

                    additional  allocation  of  marital  assets  and  no  additional  

                                                       

                    equalization payment need be made . . . .  



                                                                -6-                                                         6836
  


----------------------- Page 7-----------------------

                                                                    

awarded a home that is underwater $20,000, a debt to Chachee of $2,095.14, and was not  



                                                                                            

awarded any of the vehicles that were purchased during their cohabitation."  The superior  



court denied Aaron's motion for reconsideration without explanation.  



III.      DISCUSSION  



          A.        Marital Property Distribution:   Wanberg And Rose  



                                                                 

                    Marital  property  generally  is  divided  under  an  equitable  distribution  



                  7  

                                 

framework.   Under  Wanberg equitable division of marital assets involves three steps:  



                                                                                                                  

(1) determining the specific property available for distribution; (2) valuing the available  



                                                                                                                8  

property; and (3) equitably dividing property available for distribution.   "An equal  

division of marital property is presumptively just."9  



                                                                                                               

                     "Marital  property  includes  all  property  acquired  during  the  marriage,  



'excepting only inherited property and property acquired with separate property which  



                                              10  

                                                                                                           

is kept as separate property.' "                  Property acquired during premarital cohabitation may  



                                   11  

be  considered  marital.                 Premarital  separate  property  may  become  marital  through  



          7         See  Beals  v.  Beals,  303  P.3d  453,  458-61  (Alaska  2013)  (explaining  



equitable distribution framework before determining Rose rescission not appropriate);  

                                                                                           

 Wanberg, 664 P.2d at 570.  



          8          Wanberg, 664 P.2d at 570.  



          9  

                                                                                 

                    Berry v. Berry , 978 P.2d 93, 96 (Alaska 1999) (citing Brown v. Brown , 914  

P.2d 206, 209 (Alaska 1996);  Wanberg, 664 P.2d at 574-75).  



          10        Schmitz v. Schmitz, 88 P.3d 1116, 1125 (Alaska 2004) (quoting Lewis v.  



Lewis , 785 P.2d 550, 558 (Alaska 1990)).  



          11  

                                                                                   

                    McLaren v. McLaren , 268 P.3d 323, 332 (Alaska 2012) ("The general rule  

                                                                                                     

is that courts divide property acquired only during marriage.  But so long as the parties  

                                                

do marry, the trial court is free to consider the parties' entire relationship, including any  

                                                                            

period(s) of premarital cohabitation, in making  its  property division . . . ." (internal  

                                                                                                                (continued...)  



                                                                -7-                                                         6836
  


----------------------- Page 8-----------------------

transmutation, "the process by which one spouse's separate property becomes marital   



property, [which] 'occurs when a married couple demonstrates an intent, by virtue of                                          



their  words  and  actions  during  marriage,  to  treat  one  spouse's  separate  property  as  

marital property.' "12  



                     A  court  may  order  an  unequal  property  division  after  considering  the  

                                                                                                                  

factors enumerated in AS 25.24.160(a)(4), as long as the division is "just" and "fair."13  

                                                                                             



A court is not limited to the statutory factors and "may consider 'any other factors it  

                                                                                                                             

deems relevant' to dividing the property."14  Factual findings supporting marital property  

                                                                       

distribution "must be sufficient to indicate a factual basis for the conclusion reached."15  

                                                                                                  



                     We have concluded that:  



                      for marriages of short duration in which assets have not been  

                                                                        

                     commingled,   "the   trial   court   may,   without   abusing   its  

                     discretion,  treat  the  property  division  as  an  action  in  the  

                                                                                      

                     nature of rescission, aimed at placing the parties in, as closely  

                                                                                                   

                      as possible, the financial position they would have occupied  

                                                                      [16] 

                     had no marriage taken place."  



           11         (...continued)  



quotation marks and footnotes omitted)).  



           12        Abood v. Abood , 119 P.3d 980, 984 (Alaska 2005) (quoting Schmitz, 88  



P.3d at 1125).  



           13         Cartee v. Cartee, 239 P.3d 707, 712 (Alaska 2010).  



           14        Id. at 713 (quoting McCoy v. McCoy , 926 P.2d 460, 463 (Alaska 1996)).  



           15        Id. (citing Nicholson v. Wolfe, 974 P.2d 417, 422 (Alaska 1999)).  



           16        Dunn v. Dunn , 952 P.2d 268, 273 (Alaska 1998) (quoting Rose v. Rose , 755  



P.2d 1121, 1125 (Alaska 1988)).  



                                                                   -8-                                                             6836
  


----------------------- Page 9-----------------------

                                                                                                                          17  

                                                         

But we have "refused to apply Rose when the parties have commingled assets." 



                    We have affirmed a superior court's application of Rose even when one  



                                                       18  

                                                                

marital asset was divided equitably,                      but in an unpublished decision we cautioned that  



                                                             

"[e]quitably dividing one of a couple's assets makes sense; applying Rose 's rescission  



                                                                                         

theory  to  one  asset  does  not.    The  parties  have  either  maintained  largely  separate  



                                                                                                                                  19  

                                                                                     

economic identities, in which case application of Rose is permissible, or they have not." 



          B.        Standard of Review  



                                                                                                                  

                    When  a  superior  court  applies  Rose  rescission  "we  will  review  that  

application under our independent judgment."20  



          C.        Why We Remand For A New Property Division  



                                                                                  

                    The  superior  court's  findings  of  fact  and  conclusions  of  law  stated:  



                                                                                                 

(1)  "both  parties  are  asking  the  court  to  apply  a  modified  version  of  Rose";  and  



(2) "[n]either party proposes that the other party be allocated any of the equity, whether  



positive  or  negative,  in  the  real  property  that  the  other  party  receives."    But  Aaron  



specifically  requested  an  equitable  distribution  of  marital  property  in  his  answer  to  



          17        Id. (citing Cox v. Cox, 882 P.2d 909, 914 (Alaska 1994); Bell v. Bell , 794  



P.2d 97, 102 (Alaska 1990)); see, e.g., McCoy , 926 P.2d at 463 (affirming trial court's  

                                                     

finding  of  significant  commingling  as  not  clearly  erroneous);  Cox,  882  P.2d  at  914  

             

(concluding  sufficient  evidence  supported  trial  court's  finding  of  commingling  and  

determination  that  Rose  was  inapplicable);  Bell ,  794  P.2d  at  102-03  (concluding  

                                                                                       

commingling was "hardly insignificant" and reversing trial court's application of Rose).  

                                                                                                      



          18  

                            

                    See Dunn , 952 P.2d at 273-74 (explaining circumstances allowed for a Rose  

                                                                                                          

rescission and also holding superior court did not abuse its discretion when treating van  

as a marital asset).  



          19  

                                                                                                                       

                    Morrissette v. Kim , Mem. Op. & J. No. 1267, 2006 WL 3334056, at *2 n.12  

(Alaska, Nov. 15, 2006).  



          20        McCoy 926 P.2d at 463 (citing Bell, 794 P.2d at 102 n.10).  



                                                                -9-                                                         6836
  


----------------------- Page 10-----------------------

                                                                              

Chachee's divorce complaint.  In his trial brief Aaron "respectfully request[ed] that [the]  



                                                                                         

court include the real property and property acquired during cohabitation and equitably  



                                                                                      

divide all the disputed property."  His argument that the E. 65th home and the Duramax  



were transmuted to marital property makes sense only if Aaron were asserting a claim  



to the equity in the property.  And although Aaron's property spreadsheet suggested  



                                                                    

awarding himself the Langnes home and debt and awarding Chachee the E. 65th home  



and debt, Aaron requested an equalization payment to balance the property division.  



                   Aaron's  theories  and  questions  at  trial  provide  further  support  for  his  



assertion that he requested an equitable division of marital property.  Aaron's lawyer  



questioned Chachee on whether she alone should receive the equity in the E. 65th home,  



Aaron  testified  that  he  was  entitled  to  equity  in  the  E.  65th  home,  and  in  closing  



                                                                                                                    

arguments Aaron's lawyer described the homes and their associated equity and debts as  



                                                             

"[t]he big things in this [case]."  Finally, Aaron's motion for reconsideration - denied  



by  the  superior  court  without  explanation  -  argued  that  the  court  had  overlooked  



Aaron's request that "all property, real and personal, acquired during cohabitation and  



marriage be equally divided between the parties."  



                                                                                                                   

                    Chachee argues that even if Aaron had not consented to a Rose property  



                                        

division, the superior court found her arguments more compelling and thus applied Rose .  



                                                                                   

But this argument ignores the court's statements that the parties requested Rose and that  



neither party requested "that the other party be allocated any of the equity, whether  



                               

positive or negative, in the real property that the other party receives," as well as the fact  



that the court made no explicit findings to support its Rose application.  Without findings  



                                                                                                           

"sufficient to indicate a factual basis for the conclusion reached," it is impossible to  



                                                            -10-                                                       6836
  


----------------------- Page 11-----------------------

                                                                             21  

evaluate whether the court properly applied Rose .  



                                           

                     The  superior  court's  decision  to  apply  "a  modified  version  of  Rose ,"  



applying  rescission  principles  to  some  property  and  then  dividing  other  property  



                                                                                                                       

equitably under Wanberg, may be problematic as well.  In Dunn v. Dunn we affirmed a  



superior court decision applying Rose rescission to all of a couple's property except a  



                                                             22  

                                                                       

van, which the court divided equitably.                          In a later unpublished opinion we explained  



                       

that equitably dividing a single commingled asset may make sense, but applying Rose  



                                                                            

to only one asset does not make sense - if the parties maintained separate economic  



                                  

identities  then  Rose  should  be  applicable  to  almost  all  assets,  but  if  the  parties  



                                                                                                    23  

                                                                                                         Here it appears that  

significantly commingled assets then Rose should not apply at all. 



                                                                                                         

the  superior  court  applied  Rose  only  to  the  real  property,  while  applying  equitable  



division to the personal property.  



                     We vacate the superior court's property division and remand for further  



                    24  

proceedings.              We  therefore  do  not  need  to  decide  whether  the  court  erred  in  its  



                                                                                   

distribution of the two vehicles, as they will be a part of any new property division.  We  



          21         Cf. Cartee v. Cartee, 239 P.3d 707, 713 (Alaska 2010) (requiring findings     



to support property division applying  Wanberg rules and Merrill factors).  



          22         952 P.2d 268, 273-74 (Alaska 1998).  



          23  

                                                                                                                            

                    Morrissette v. Kim , Mem. Op. & J. No. 1267, 2006 WL 3334056, at *2 n.12  

(Alaska, Nov. 15, 2006).  



          24         Because  the  superior  court  failed  to  make  factual  findings  determining  



whether Aaron and Chachee commingled their property, we decline to decide whether  

they significantly commingled assets and whether the superior court is precluded from  

                                                                               

applying Rose .  But we note that this case appears similar to Bell v. Bell where we found  

                                                   

that the parties commingled assets to purchase and improve properties, the commingled  

                                                                         

assets were a substantial portion of the parties' income, and the "assets to which there  

has been mutual contribution by the parties greatly depreciate or appreciate in value."  

                                                     

794 P.2d at 102.  



                                                                -11-                                                          6836
  


----------------------- Page 12-----------------------

do not mean to suggest that the court's allocation of the many other items of personal  



                                                                  

property is vacated, although if the court engages in an equitable distribution of all of the  



parties' marital (and possibly pre-marital, cohabitation) property, it may reallocate the  



property or order an equalization payment to achieve an equitable distribution.  



IV.      CONCLUSION  



                                                            

                  For  the  reasons  stated  above,  we  VACATE  the  property  division  and  



REMAND for further proceedings.  



                                                      -12-                                                  6836
  

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