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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Wanner-Brown v. Brown (11/22/2013) sp-6844

Wanner-Brown v. Brown (11/22/2013) sp-6844

         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  



TAMMY WANNER-BROWN,                                    )  

                                                       )         Supreme Court No. S-14814  

                  Appellant,                           )  

                                                       )         Superior Court No. 3AN-11-09866 CI  

         v.                                            )  

                                                       )         O P I N I O N  

CONRAD BROWN,                                          )  

                                                       )         No. 6844 - November 22, 2013  

                  Appellee.                            )  

                                                       )  



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

                                                                    

                   Judicial District, Anchorage, Eric A. Aarseth, Judge.   



                  Appearances: Justin Eschbacher and G.R. Eschbacher, Law  

                                       

                   Offices of G.R. Eschbacher, Anchorage, for Appellant.  Carl  

                                                                                                

                   D. Cook, Law Office of Carl D. Cook, P.C., Anchorage, for  

                                                                          

                  Appellee.   



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

                   Bolger, Justices.  



                   STOWERS, Justice.  



I.       INTRODUCTION  



                   Conrad  Brown  and  Tammy  Wanner-Brown  married  in  1992.    In  2011  

                                                                                                   



Conrad  filed  for  divorce.    A  trial  was  scheduled  to  resolve  both  child  custody  and  

                                                                            



property disputes.  On the first day of trial, the parties filed an agreement resolving the  

                                                                  



custody issues.  The trial proceeded regarding the division of property.  A major issue  


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

                                                                                                          

involved Conrad's State of Alaska retirement medical benefits.  For purposes of defining  



                                                                                                   

retirement benefits, the State has four "tiers."  What tier an  employee belongs to is  



                                                             1  

                                                                                                 

dependent on the employee's start date.                         The main difference between the tiers is the age  



                                                                                              

at which  benefits  may  be  received  -  Tier  1  employees  can  receive  full  retirement  



                                                                                                        

benefits, including medical benefits, at the age of 55 while Tier 2 employees must wait  



                                                                                                             

until the age of 60.  Because a Tier 1 employee can begin receiving benefits five years  



                           

earlier, the total value of this status is worth much more than the value of Tier 2 status.  



                     Before his marriage, Conrad had briefly worked for the State at a time when  



                                                                                       

all employees in his position were classified as Tier 1. Conrad cashed out his retirement  



                                                                                              

benefits when he left the position after six months.  After he married Tammy, he became  



re-employed with the State and completely re-earned his retirement benefits.  Conrad  



                                                                                 

was still classified by the State as Tier 1 because of his prior employment with the State.  



The present value of his medical benefits under a Tier 1 calculation was $248,350 as of  



the date of trial.  



                                                                                        

                     The superior court decided Conrad was a Tier 2 employee for purposes of  



                                                                                                                       

valuing and distributing marital assets because "[t]he Tier 1 eligibility was earned prior  



to the marriage" and "[t]he marital assets (i.e. time, risk, money) spent to allow the  



                                                                                                    

plaintiff to vest with the State of Alaska were no different for a Tier 1 than for a Tier 2."  



                                            

The court determined that Conrad's Tier 2 retirement benefits had a present value of  



$ 170,879.39 and awarded these benefits to Conrad.  The court awarded Tammy the  



couple's two rental properties and all of the marital debt, and ordered her to pay Conrad  



      

an equalization payment of $11,590 within a year.  The court also ordered Tammy to  



           1  

                                                                                                                     

                     Tier 1 includes employees who started before July 1986; Tier 2, before July  

                                                                                                          

1996;  Tier  3,  before  July  2006;  and  Tier  4,  since  July  2006.  Public  Employees'  

                                                                        

R e t i r e m e n t            S y s t e m           ( P E R S )           P l a n        C o m p a r i s o n              C h a r t ,   

http://doa.alaska.gov/drb/pdf/pers/perstieri-ivchart.pdf (last visited Nov. 13, 2013).  



                                                                  -2-                                                                6844  


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

                                                                                                                   

refinance the two rental properties within one year to remove Conrad's name from the  



titles and debt.  



                    Tammy appeals, arguing that:  (1) Conrad's retirement classification should  



                                                     

have been Tier 1, not Tier 2; (2) the court miscalculated the value of the medical benefits  



                                                                            

even if they were Tier 2; (3) the court erred by not taking into consideration the cost of  



selling one of the properties even though the property division had the practical effect  



                   

of requiring her to sell it; and (4) the court gave her an impossibly short time to refinance  



                                                                                                       

the loans on the rental properties.  We hold that the superior court erred by valuing  



                                                                  

Conrad's retirement medical benefits as Tier 2 instead of Tier 1 and remand for the court  



                                           

to recalculate these benefits and reconsider its property division.  Thus, we decline to  



reach Tammy's other points on appeal.  



II.       FACTS AND PROCEEDINGS  



          A.        Facts  



                    Conrad Brown and Tammy Wanner-Brown were married in September  



                                                                                                               

1992.  The couple had two children together, who are now ages 17 and 13.  Tammy was  



                                                                         

employed for many years as a general manager at a Days Inn in Anchorage, and Conrad  



                                                    

worked  as  a  probation  officer  in  Palmer.    In  2010  Tammy's  reported  wages  were  



$58,500 and Conrad's reported wages were $47,547.  



                    Before Conrad and Tammy separated, they had accumulated a significant  



                                                                                                                 

amount of debt.  The family owned a home on which they owed $255,287.66.  They also  



owned two rental properties:  a duplex on Duben Drive and a condominium on Reka  



Drive.  The duplex was built for the couple by Tammy's father, and the condominium  



                                                         

was inherited from Conrad's parents.  Conrad and Tammy mortgaged both properties,  



                                                                           

and  they  owed  $254,378.77  on  the  duplex  and  $45,377  on  the  condominium.    In  



                                                                              

addition, the couple had $28,149 in credit card debt.  Conrad and Tammy also had a loan  



                                                                                

from Wells Fargo for $13,188.66, which they used to buy a travel trailer, and a debt to  



                                                             -3-                                                        6844
  


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

J.C. Penney on which they owed $1,142.22.  They had car loans on both of their vehicles                      



- $8,303 on Tammy's Hyundai and $8,270 on Conrad's Chevy.  Finally, the couple had  



                            

numerous smaller debts owed to service providers, banks, and various third parties.  The  



                                                                                                                   

minimum payment for the credit card debt and the couple's larger debts was $1,055 a  



month.  



                                                                                                    

                    In March 2011 Conrad left the family home. In June he ceased contributing  



to the payments on the family's debts, and the family home went into foreclosure.  



          B.        Proceedings  



                                                                            

                    Conrad filed for divorce in May 2011.  Tammy asked the superior court for  



                                                                                                    

an  equitable  division  of  the  family's  property.                    She  submitted  a  proposed  property  



                                                                                     

division table in which the Reka condominium would be sold and the proceeds used to  



pay off the couple's debts.  She also submitted an alternate property division proposal  



in  which  Conrad  would  receive  the  Reka  condominium  and  she  would  be  paid  an  



equalization payment.  In both proposals she suggested that the court value Conrad's  



medical retirement benefits at $248,350, and she included a statement from financial  



                                                                         

planning expert witness Sheila Miller supporting this valuation.  Conrad also submitted  



                                                                                              

two proposed property divisions.  In the first he suggested that the court give no value  



                                                                 

to his medical retirement benefits and that it award the Reka condominium to him.  In the  



second he proposed that his medical retirement benefits be valued at $148,651, that  



                                                                           

Tammy receive the Reka condominium, and that she pay him a $25,281 equalization  



payment.  



                                                                            

                    The superior court conducted a trial regarding the value of Conrad and  



                                                                                                   2  

                                                                                                      Miller testified at  

Tammy's real property, household items, and employment benefits. 



length regarding Conrad's retirement benefits. She explained that Conrad would receive  

                                                                            



          2         Conrad and Tammy came to an agreement on child custody issues.  



                                                             -4-                                                           6844  


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

Public Employees' Retirement System (PERS) medical retirement benefits from the State  



when he turned 55.  Miller described her calculations regarding the monetary value of  



                                   

the medical retirement benefits Conrad would receive through his PERS account.  Miller  



                                                                                                                               3  

                                                 

stated that she had followed the procedure this court prescribed in Hansen v. Hansen ,  



                              4                                5  

Ethelbah v. Walker ,  and Sparks v. Sparks  for determining the value of those medical  



                                                                                                  

benefits.  She described how the benefits were "basically medical insurance provided at  



                                                                  

the cost of the plan - the plan underwrites a hundred percent of the cost - to retirees  



in the PERS system."  



                    Miller explained that the State has four tiers which determine the age at  



                                                            

which an employee can begin to receive his benefits.  Because Conrad was classified by  



                                                                                                         

the  State  as  Tier  1,  he  will  receive  his  medical  benefits  starting  at  age  55.    Miller  



described how one calculates the value of these benefits:  



                    [Y]ou take the current premium, you apply inflation factors  

                                                                                        

                    for what you think it's going to grow by, and then you apply  

                                                                          

                    discount factors, to bring that future cash flow stream back to  

                                                                                              

                    a present value in today's dollars, and total up the sum of the  

                    numbers and you basically have a present value.  



                    Miller also explained the actuarial computation method she used to compute  



                                                                                                    

the benefits' monetary value based on Conrad's life expectancy.  Under this method,  



                      

Miller looked at the probability that Conrad will live to a designated year, starting with  



                                                                                      

a 96.6% chance he will live to retirement at age 55 and continuing until a 0.00005%  



chance he will live to be 110 years old.  She then discounted the value of the medical  



benefits  to  him  each  year  by  the  probability  that  he  will  live  to  that  age.    Miller  



          3         Hansen v. Hansen , 119 P.3d 1005 (Alaska 2005).  



          4         Ethelbah v. Walker , 225 P.3d 1082 (Alaska 2010).  



          5         Sparks v. Sparks, 233 P.3d 1091 (Alaska 2010).  



                                                              -5-                                                           6844  


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

concluded  that  the  "present  value"  of  the  Tier  1  medical  retirement  benefits  was  



$248,350.  



                                                                                                    

                     Miller also analyzed Conrad's Tier 1 status.  Miller explained that Conrad  



                                   

was Tier 1, not Tier 2, because he had worked for the State for six months at a time when  



                           

his position was classified as Tier 1.  Then Conrad resigned from State employment and  



                                                                                                          

cashed  out  his  retirement  benefits.    Conrad  later  married  Tammy  and  subsequently  



                                                                                                                         

became re-employed by the State.  At the time he became re-employed by the State, all  



        

new employees in his position were classified as Tier 2, but Conrad retained his original  



                                                                                                     

Tier 1 classification because of his original Tier 1 service with the State.  However,  



                                                                                                      

because he had cashed out his original retirement benefits, the time period for the vesting  



of his benefits started over again.  Thus, all of the vesting time that counted towards  



                                                                                       

Conrad's earning of his future benefits occurred during the marriage.  Miller reasoned  



                                                                                                    

that "[Conrad's] Tier 1 classification, as of the date of marriage, was worthless.  There  



                                                    

was no value to it . . . .  It became valued when he earned five years of service, which he  



                  

did during the marriage."  Miller noted that the vesting period for Tier 1 and Tier 2 are  



exactly the same.  Conrad was only able to acquire his Tier 1 status because he worked  



for the State before the State created the Tier 2 classification.  



                                                                           

                     The court "accept[ed] Ms. Miller's testimony regarding the valuation of the  

plaintiff's retiree medical benefit."6  However, the court rejected Tammy's argument that  



the marital retirement benefits should be valued as Tier 1 instead of Tier 2.  The court  

                                                                                                                       



decided that "[t]he Tier 1 eligibility was earned prior to the marriage" because "[t]he  

                                                                                                               



marital assets (i.e. time, risk, money) spent to allow the plaintiff to vest with the State of  



Alaska were no different for Tier 1 than for Tier 2."  The court concluded that "[w]hat  

                                                                                                   



the Plaintiff earned during his work for the State of Alaska while married was effectively  

                                                                                                               



          6          Conrad presented no expert witness at trial.  



                                                                -6-                                                              6844  


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

a Tier 2 retirement as far as the defendant is concerned."  The court valued Conrad's  



                                       

Tier 2 retirement medical benefits as $170,879.36 and determined the benefits start when  



Conrad becomes 60 years old.  



                                                                             

                    The superior court found that an equal property division would be "fair and  



equitable considering the current financial standing and income-earning capability of  



each  party."    Among  other  items,  the  court  awarded  Conrad  his  retirement  medical  



                                                                   

benefits.  The court awarded Tammy both the Duben duplex and the Reka condominium,  



                                                      

all of the debt associated with these properties, all other marital debt, and ordered her to  



                                                           

pay Conrad an equalization payment of $11,590 within a year.  Finally, the court ordered  



                                                                                                                 

Tammy to refinance the loans on both rental properties to remove Conrad's name from  



the titles and the debt.  The court gave her 12 months to accomplish this and stated that  



                                                                          

if "for some reason 12 months is not enough time" to complete the refinancing, she could  



apply for more time if she could show she had diligently attempted to complete the  



refinancing.  



                                                                                              

                    Tammy moved for reconsideration.  She argued that:  (1) the retirement  



                                                                                                           

medical  benefits  should  have  been  valued  as  Tier  1,  not  Tier  2;  (2)  the  court  



                            

miscalculated the  retirement medical benefits even if they were to be considered as  



Tier 2; (3)  the court should have deducted the cost of selling the Reka condominium  



                                                       

from her award because the award  had the practical effect of forcing her to sell the  



condominium to pay her debts; and (4) the court overlooked a material fact when it  



ordered  her  to  refinance  within  one  year  because  the  family  home  was  currently  



                                                  

undergoing a short sale in lieu of foreclosure and she would not be able to refinance for  



                               

a minimum of two  years.  Conrad responded that his benefits should be considered  



                                   

Tier 2, not Tier 1; that Tammy never raised the issue of the Reka sales expenses before  



                                                               

her motion to reconsider; and that because Tammy had mismanaged the property during  



the marriage, she should now shoulder the burden of its depreciated value.  



                                                              -7-                                                        6844
  


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

                    The  superior  court  ultimately  declined  to  alter  its  original  property  



                                                         

distribution.  It found that the concerns about the sale expenses of the Reka condominium  



                                                                                              

were "post-trial factual issues that should have been addressed at trial."  It ruled that it  



                                                                                                 

would only consider extending the time limit for refinancing after the original time limit  



elapsed and Tammy showed she had made "due diligent efforts" to refinance, but the  



                     

court agreed to give Tammy an extra three months to make the equalization payments  



                                                                   

"in  anticipation  of  the  sale  or  refinance  of  the  Reka  property."    Conrad  moved  for  



attorney's fees and Tammy opposed.  Tammy filed a motion for relief from judgment  



pursuant  to  Alaska  Civil  Rule  60(b);  she  also  asked  for  more  time  to  make  the  



equalization payment, and she requested an evidentiary hearing.  



                                   

                    The court denied Conrad's motion for attorney's fees, Tammy's request for  



an evidentiary hearing, and Tammy's request for Rule 60(b) relief.  It granted Tammy  



             

another three-month extension of time for the equalization payment, but stated that it  



                                           

would not grant any further extensions "regardless of the status of sale or refinance of  



                                

the Reka property."  Finally, the court found that Tammy was choosing to sell the Reka  



property, not being forced to, and that it would not "re-adjust its findings to correct for  



her choices."  



                    Tammy appeals, arguing that:  (1) Conrad's retirement classification should  



                                          

have been Tier 1, not Tier 2; (2) the superior court miscalculated the value of the medical  



                                                                                                       

benefits even if they were Tier 2; (3) the superior court erred by not considering sales  



                            

costs for the Reka condominium because its property division had the practical effect of  



                                                              

requiring her to sell the property; and (4) she was given an impossibly short amount of  



time to refinance the properties awarded to her.  



III.      STANDARD OF REVIEW  



                    When dividing marital property, the court (1) characterizes the property as  



marital  or  non-marital,  (2)  finds  the  value  of  the  property,  and  then  (3)  divides  the  



                                                             -8-                                                        6844
  


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

                             7  

property equitably.   The characterization of property as marital involves questions of  



                            8  

both  law  and  fact.     Questions  of  law  are  reviewed  de  novo  using  our  independent  



                                                                                   9  

judgment; findings of fact are reviewed for clear error.    "A finding of fact is clearly  

                                   



erroneous  when  'a  review  of  the  record  leaves  the  court  with  a  definite  and  firm  



                                                                                            10  

conviction  that  the  superior  court  has  made  a  mistake.'  "                                Once  the  court  has  



                                                                         

characterized the asset, its valuation of the asset is a factual determination that we also  



                                 11  

review for clear error.              



                    We  review  the  court's  actual  division  of  the  property  -  once  it  has  



                                                                                                      12  

characterized  and  valued  the  property  -  for  abuse  of  discretion.      "An  abuse  of  



discretion  occurs  if  the  court  considers  improper  factors,  fails  to  consider  relevant  



statutory  factors,  or  assigns  disproportionate  weight  to  some  factors  while  ignoring  

others."13  



IV.       DISCUSSION  



                                                                                     

                    The superior court concluded that Conrad's Tier 1 retirement classification  



                                                                              

was  not  marital  property,  and  when  it  calculated  the  value  of  Conrad's  retirement  



benefits, the court valued the benefits as though they were Tier 2.  Tammy argues that  



          7         Beals v. Beals , 303 P.3d 453, 458-59 (Alaska 2003). 
 



          8         Id . at 459.  
 



          9         Id . 
 



          10        Chesser  v.  Chesser-Witmer,  178  P.3d   1154,  1156-57  (Alaska  2008)
  



(quoting Borchgrevink v. Borchgrevink , 941 P.2d 132, 134 (Alaska 1997)).  



          11        Beals , 303 P.3d at 459.  



          12        Hansen v. Hansen , 119 P.3d 1005 (Alaska 2005).  



          13        Id. at 1009.  



                                                              -9-                                                        6844
  


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

                                                                   

according to Hansen v. Hansen , the portion of retirement benefits that is acquired with  



                                                                                                       

marital  resources  is  marital  property,  regardless  of  when  the  tier  classification  was  



               14  

                                                                                                               

achieved.          Thus, Tammy contends, because the entire vesting period  for Conrad's  



retirement benefits occurred during the marriage, the entire benefits are marital property,  



including the Tier 1 classification.  Tammy is correct.  



                    We have held that medical retirement benefits obtained during a marriage  



                                                                                         15  

are marital property to be valued and divided upon divorce.    "That the benefits cannot  



be  transferred  is  irrelevant  because  'market  transferability  is  not  a  prerequisite  to  

determining value for property division.' "16  



                                                                                                                       17  

                                                                                                                 

                    In Hansen we considered a situation very similar to the case here.                                      One  



                                                                           

spouse had a PERS retirement account which she had earned and cashed out prior to the  



               18                                                                                                               19  

                                                                                  

marriage.          She repurchased her PERS benefits during the marriage with marital funds. 



                                                                     

We concluded that "[f]or purposes of valuing [the spouse's] retirement health insurance  



benefit,  work  she  performed  before  the  marriage  must  be  treated  as  having  been  



          14        Id .  



          15        Id . at 1015; see also   Burts v. Burts , 266 P.3d 337, 341 (Alaska 2011);  



Sparks v. Sparks, 233 P.3d at 1091, 1097;                         Ethelbah v. Walker , 225 P.3d at 1087-90;  

Kinnard v. Kinnard , 43 P.3d 150, 156 (Alaska 2002).   Conrad  "disputes that any value   

should be assigned to the retiree medical benefits because he will not receive the benefit     

until he retires."  However, as the above cited cases clearly show, Alaska law requires  

that retiree medical benefits earned during the marriage be given a value for purposes of  

divorce property distribution.  



          16  

                                                                           

                    Hansen , 119 P.3d at 1015 (internal punctuation omitted) (quoting Martin  

v. Martin, 52 P.3d 724, 731 (Alaska 2002)).  



          17        Id. at 1014-16.  



          18        Id. at 1014.  



          19        Id . at 1014-15.  



                                                              -10-                                                         6844
  


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

performed during the marriage because [the spouse] used marital funds to buy back this   



                               20  

part of the benefit."              We then directed the superior court to determine the coverture  



fraction, or the number of years worked during the marriage divided by the total number  



                                                                                                                  

of years worked to obtain the benefits, and to use this fraction to determine what percent  



                                                           21  

                                                               We stated explicitly that "[t]o the extent [the  

of the retirement benefits was marital. 



spouse] used marital funds to buy back health benefits for work performed before the  



                                                                   

parties began living together, that period of work must be treated as part of the period of  

coverture."22  



                     Sheila  Miller,  Tammy's  expert  on  financial  planning,  testified  that  she  



attempted  to  follow  Hansen  when  valuing  Conrad's  benefits.    She  reasoned  that  



                                                                      

Conrad's "Tier 1 classification, as of the date of marriage, was worthless.  There was no  



                                                                                               

value to it . . . .  It became valued when he earned five years of service, which he did  



                                                                                    

during the marriage."  Thus, she concluded the entirety of the Tier 1 benefits was marital.  



                                                                                                   

The superior court disagreed and found the Tier 1 classification to be pre-marital because  



                                                                             

"[t]he marital assets (i.e. time, risk, money) spent to allow the plaintiff to vest with the  



                                                                                              

State  of  Alaska  were  no  different  for  Tier  1  than  for  Tier  2."  Therefore,  the  court  



                                  

decided,  "[w]hat  the  Plaintiff  earned  during  his  work  for  the  State  of  Alaska  while  



married was effectively a Tier 2 retirement as far as the defendant is concerned."  



                    We conclude that Conrad's medical retirement benefits should have been  



                                                                                 

valued as Tier 1 because, as we stated in Hansen , if retirement benefits are cashed out  



before the marriage and then repurchased or re-earned with marital assets, they become  



          20        Id . at 1015.  



          21        Id.  



          22        Id.  



                                                               -11-                                                             6844  


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

marital property.23  Here, though Conrad's Tier 1 status was earned prior to the marriage,  



he re-earned the benefits during the marriage with marital resources (his time).  As in  



                                   

Hansen , the period of work during which the benefits were originally earned "must be  



                                                                  24  

treated as part of the period of coverture."                          Thus, the court erred when it classified  



Conrad's Tier 1 status as pre-marital property.  Due to this error, the court's valuation  



                                                                                                                 

of his benefits was clearly erroneous because its calculations were based on Tier 2 status.  



We reverse the superior court's Tier 2 finding and its related valuation of benefits and  



                                                                         

remand for the court to recalculate the value of the medical retirement benefits under a  



                               

Tier 1 calculation.  Because this new calculation will substantially change the value of  



                          25 

                                                                                               

the marital estate,          the superior court will need to reconsider its overall property division  



to accommodate this change in valuation.  We therefore do not reach the rest of Tammy's  



                   , 

                 26  27 

arguments. 



          23        Id.  



          24        Id .  



          25        Under the court's Tier 2 valuation, the retirement medical benefits were  



worth $ 170,879.36. Under Sheila Miller's undisputed Tier 1 valuation, the benefits had  

                                                                  

a present value of $248,350.  



          26        Though  we  do  not  reach  Tammy's  argument  that  it  was  an  abuse  of  

                                  

discretion for the superior court to give her only one year to refinance the couple's two  

rental properties, given that the family home had just undergone a short sale, which  

clearly was going to negatively affect Tammy's ability to refinance, we are concerned  

that Tammy may have been ordered to accomplish a near impossibility.  We remind the  

                                    

trial courts that they should carefully consider the difficulties of refinancing after a party  

                                                                                             

has experienced a very negative credit event such as a short sale or a foreclosure when  

                                                                                            

ordering  or  otherwise  effectively  requiring  a  party  to  refinance  marital  property  

                                     

following a divorce.  



          27        We are also troubled by the superior court's decision not to consider the  



                                                                                                               (continued...)  



                                                              -12-                                                         6844
  


----------------------- Page 13-----------------------

V.        CONCLUSION  



                                             

                    We REVERSE the superior court's finding that Conrad's Tier 1 medical  



                  

retirement benefits should be valued as Tier 2 and REMAND for a new valuation and  



property division.  



          27(...continued)  



sales costs of the Reka condominium during the property division.  The court knew that  

                                                                                                                     

the family home was underwater (the balance owed on the home loan exceeded the value  

                                                                     

of the property) and that the home was in the process of being sold at short sale.  The  

court knew that Tammy's credit score would be severely negatively impacted by this  

                          

short sale and by missed payments on the couple's other debts, that it was awarding her  

                                                                                                       

all of the couple's debt, and that it was requiring her to make an $11,590 equalization  

                                                                                      

payment to Conrad within a year's time. In her motion for reconsideration, Tammy cited  

                                                                                                                 

Tollefsen v. Tollefsen, 981 P.2d 568 (Alaska 1999) and argued that the superior court  

erred by not considering in its property distribution the costs she would incur associated  

                                                                              

with selling the Reka condominium.  The superior court declined to change its property  

                                                                             

distribution, stating that Tammy "has made business choices about how to manage the  

Reka property.  She elected to sell rather than rent or refinance. . . .  The defendant's  

                                                                                    

choices are just that, her choices." 



                     This decision and rationale appear to be at odds with our decisions in  

Day v. Williams , 285 P.3d 256, 266-67 (Alaska 2012) (holding that the superior court's  

                           

failure to consider the costs associated with a forced sale of real property prevented the  

                                                                      

property distribution from being just and fair), Fortson v. Fortson, 131 P.3d 451, 461  

(Alaska 2006) (holding that if "a court order or external conditions force a party to sell"  

                                                                                                              

some of the property she has been awarded, the court must consider the costs associated  

                                                                                 

with the sale), and Tollefsen, 981 P.2d at 572 (holding that "although the superior court  

                                                                                          

expressly found that Mary was the economically disadvantaged party, the court's failure  

                                                

to make provision for the costs of repairs and sale of the real property awarded to Mary  

                                                                                             

defeated its stated goal of awarding her the greater share of the marital estate").  



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