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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Dundas v. Dundas (12/11/2015) sp-7070

Dundas v. Dundas (12/11/2015) sp-7070

           Notice:   This opinion is subject to correction before publication in the P                     ACIFIC  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@akcourts.us.  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                        



DEA  DUNDAS,                                                          )  

                                                                      )     Supreme  Court  No.  S-15599  

                                 Appellant,                           )  

                                                                                                                                       

                                                                      )     Superior Court No. 3CO-11-00005 CI  

           v.                                                         )  

                                                                                                 

                                                                      )     O P I N I O N  

                                  

JAMES DUNDAS,                                                         )  

                                                                                                                        

                                                                      )     No. 7070 - December 11, 2015  

                                 Appellee.                            )  

                                                                      )  



                                                                                                               

                      A            

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

                                                                                    

                      Judicial District, Palmer, Eric Smith, Judge.  



                                                                                                   

                      Appearances:               G.R.  Eschbacher  and  Justin  Eschbacher,  

                                                                                                                     

                      Anchorage, for Appellant.  Rhonda F. Butterfield, Wyatt &  

                                                                              

                      Butterfield, LLC, Anchorage, for Appellee.  



                                                                                                                   

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

                                    

                      Bolger, Justices.  



                                           

                      WINFREE, Justice.  



I.         INTRODUCTION  



                                                                                                                                   

                      A couple filed for divorce, but the divorce was not finalized for nearly  



                                                                                                                                

three-and-a-half years. In the interim the couple continued to treat certain bank accounts  



                                                                                                                                      

as  marital  and others as separate, making it difficult for the superior court to later  



                                                                                                                                               

determine when the joint marital enterprise ended and how to value the bank accounts.  


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

                                                                                                                               

This appeal presents issues under each step of the equitable distribution process -  



                                                                                                                      

identification, valuation, and distribution - as well as issues of alimony, child visitation  



                                                                                                                         

expenses,  and  child  support  credits.                     As  set  forth  below,  we  remand  for  further  



                                                     

proceedings on a number of these issues.  



                                  

II.       FACTS AND PROCEEDINGS  



                                                                                                                           

                    Dea and James Dundas married in 1997 after a lengthy relationship. James  



                                                                                                                   

began commercial fishing in the early 1990s, and in 1992 attended heavy equipment  



                                                                                                                   

school  in  Washington.                In  1993  Dea  received  an  associate's  degree  in  marketing,  



                                                                                                                           

management, and business from an Oregon community college. In the late 1990s James  



                                                                                                                               

and Dea began operating a bed and breakfast (B&B). They later acquired a home on the  



                                                                                                                              

same road as their B&B and constructed a large shop adjacent to their home.  James and  



                                                                                                                              

Dea formed Dundas,Inc. -aconstructioncompany focusing on excavation -with Dea  



                                                                                                   

owning  60% and  James  40%;  they  acquired  a  gravel  pit  (pit  property)  for  storing  



                                                                                                                          

equipment. James worked seasonally for the State plowing snow from roads; as a Public  



                                                                                                                            

Employees' Retirement System (PERS) Tier 3 employee, James's job with the State  



                                                                                                                             

provided health insurance for the family.   James also worked as an on-call oil spill  



                      

responder for Alyeska.  



                                                                                                                            

                    Dea raised their two sons, operated the B&B, kept the books for their  



                                                                                                                             

businesses,  and  filed  their  taxes.                 Dea  also  was  an  expediter  for  the  fishing  and  



                                                                                                                        

construction businesses, purchasing and delivering supplies to job sites and to James's  



                                                                                                                             

boat. According to Dea, James is one of the best heavy equipment operators in the area,  



                                                                                                                       

andJames acknowledges that Dea's hard work was asubstantial reason for their financial  



                                                                                                                         

success. Through their industry and skill, James and Dea acquired roughly $1.7 million  



                 

in marital assets.  



                                                                                                                         

                    In January 2011 Dea filed for divorce, and James moved out of the marital  



                                                                                                                                  

home later that year.  On October 25, 2012 they attended a mediation session with a  



                                                               -2-                                                         7070
  


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

                                                                                                                                

retired judge and agreed to treat all funds currently in their bank accounts as marital but  



                                             

to treat all future earnings as separate.  



                                                                                                                         

                    Before trial Dea informed the court that she planned to relocate to Oregon  



                                                                                                                      

with the children to pursue higher education and be closer to her family.  Dea requested  



                                                                                                                      

65%ofthemarital property, both rehabilitativeand reorientationalimony, and attorney's  



                                                                                                                               

fees. Before trial James requested a 50/50 marital property division and argued that Dea  



                                                                                                                             

should not be awarded alimony or attorney's fees.  The divorce trial lasted five days  



                                                     

between May 2013 and February 2014.  



                                                                                                              

                    Dea hired a financial expert, Sheila Miller, who prepared Dea's property  



                                                                                                                             

spreadsheet and valued the parties' bank accounts and annual cash flows between 2011  



                                                                                                                        

and 2013. Miller entered both the bank account and cash flow values as marital property  



                                                                                                                                

on Dea's proposed property spreadsheet.  During trial Miller testified at length, and the  



                                          

court found her testimony credible.  



                                                                                                                     

                    In early April 2014 the court ordered Dea to pay all of the children's  



                                                                                                                           

visitation expenses if she chose to relocate to Oregon.  In late April the court issued  



                                                                                                                           

findings of fact and conclusions of law. The court determined that James and Dea ceased  



                                                                                                                      

functioning  as  an  economic  unit  on  October  25,  2012,  the  date  of  their  mediated  



                                                                                                                     

agreement. The court valued the parties' bank accounts according to Miller's testimony,  



                                                                       

but it disregarded Miller's separate cash flow analysis.  



                                                                                                                       

                    Thecourt dividedtheparties'substantialmaritalproperty equally, awarding  



                                                                                                                                      

Dea the B&B, the pit property, and proceeds from heavy equipment sold during trial.  



                                                                                                                               

The court gave James a credit for his estimated 2013 income tax liability. The court also  



                                                                                                                          

ordered James to pay child support from October 25, 2012 onward, but credited marital  



                                                                                                                                

expenses he had paid in 2012 and 2013 against his arrearage.  On reconsideration the  



                                                                                                                               

court denied Dea's renewed request for attorney's fees and her request that she not pay  



                                            

the children's full visitation expenses.  



                                                                -3-                                                         7070
  


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

                                 Dea   appeals,   primarily   challenging   the   superior   court's   decisions  on:   



(1)   the   parties'   economic   separation   date;   (2)   the   marital   property   distribution;  



(3)   James's   credit   for   his  2013  income   tax   liability;   (4)   James's   potential   PERS  



retirement health benefits; (5) the valuation of certain marital accounts, properties, and                                                                                                                  



cash flows; (6) the tax liabilities associated with the sales of marital property awarded                                                             



to Dea; (7) her alimony requests; (8) the children's visitation expenses; (9) James's child                                                                                                              



support credit; and (10) her attorney's fees request.                                                      



III.             DISCUSSION  



                 A.              Economic Separation Date                                  



                                 We have characterized the separation date as when " 'the marriage has                                                                                                      



terminated as a joint enterprise' or when a couple is no longer 'functioning economically                                                                                           

as a single unit.'                               1      Because the separation date may  determine whether  acquired  

                                              "                                                                                                                                                



property is marital or separate, this date is critical to the identification and valuation of  

                                                                                                                                                                                                               



the marital estate; it "should ideally be set at the actual termination point of the marital  

                                                                                                                                                                                                    



partnership, so that assets which are not actual fruits of the parties' joint efforts are not  

                                                                                                                                                                                                             

included in the marital estate."2                                                    Determining "the separation date is a fact-specific  

                                                                                                                                                                                      



                 1               Tybus v. Holland                          , 989 P.2d 1281, 1285 (Alaska 1999) (quoting                                                                     Hanlon v.   



Hanlon, 871 P.2d 229, 231 (Alaska 1994)).                                                 



                 2                1 BRETT  TURNER, E                              QUITABLE  DISTRIBUTION OF                                            PROPERTY    5.28, at 423  

                                      

                                                                                                                                                                                                             

(3d ed. 2005); see also id. at 435-36 ("The date of separation is the date on which the  

                                                                                                                                                                                             

parties separate finally, with intent to terminate the marital relationship.  This definition  

                                                                                                                                                                                                             

has two elements, one objective and one subjective.  The objective element is that the  

                                                                                                                                                                                           

parties must separate - live physically apart from one another. . . . The subjective  

                                                                                                                                                                                           

element is that at least one party must intend to terminate the marriage." (footnotes  

                                                                                                                                                                                                          

omitted) (citing, approvingly for the proposition, three Alaska cases:  Tybus, 989 P.2d  

                                                                                                                                                                                                          

at 1281; Ramsey v. Ramsey, 834 P.2d 807 (Alaska 1992); and Jones v. Jones, 835 P.2d  

                                   

 1173 (Alaska 1992))).  



                                                                                                       -4-                                                                                              7070
  


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

                 3                                                                                                                                            4  

inquiry,"  and the superior court accordingly has considerable discretion in this area.                                                                           



                                                                                                                                               5 

                                                                                                         

We have affirmed separation date determinations based upon various factors,  but one  



                                                                                                                                                           

party's "continuing economic dependence alone does not indicate the continuance of the  



                                            6  

                                  

marital economic unit." 



                         The superior court determined that James and Dea "basically acted as a  

                                                                                                                                                              



married couple" up until July 2012, when marriage counseling efforts failed.  The court  

                                                                                                                                                       



concluded that the parties ceased to function as an economic unit on October 25, 2012  

                                                                                                                          



- the date of their mediated agreement - for three reasons. First, on that date they each  

                                                                                                                                                        



agreed to "work on a marital business but [to] treat that income as separate."  Second,  

                                                                                                                                                



finding on these facts that a marital partnership continued "would mean that no couple  

                                                                                                                                                    



ever could separate as long as one continued to operate a marital business." And finally,  

                                                                                                                                                   



from that date onward, Dea operated the B&B while James fished and fulfilled his oil  

                                                                                                                                                           



spill response contract "without any real input or involvement from the other party."  

                                                                                                                                                



                         Dea argues the court abused its discretion by selecting October 25, 2012  

                                                                                                                                                       



as the parties' economic separation date because neither party advocated for this date at  

                                                                                                                                                             



            3            Tybus, 989 P.2d at 1285.            



            4            See Schanck v. Schanck                       , 717 P.2d 1, 3 (Alaska 1986) ("We decline to                                         



specify, as a matter of law, . . . the effective date when [post-separation] earnings become  

                                                                                                                                                  

severable from [pre-separation] marital property . . . . Each case must be judged on its   

facts . . . .").         



            5            SeeInman v. Inman, 67 P.3d 655,659-60(Alaska2003)(examining factors  

                                                                                                                                                    

such as sexual relations, economicsupport, commingling of assets, joint tax returns, joint  

                                                                                                                                                        

liability, and manifesting a desire to continue the marriage); see also Tybus, 989 P.2d at  

                                                                                                                                                             

 1285 (affirming separation date determination based on one party's physical act of re- 

                                                             

keying locks manifesting intent to end marriage that was so understood by other party).  

                                                                                                                                                    



            6           Ramsey,  834  P.2d  at  809;  see  also  Tybus,  989  P.2d  at  1285  (finding  

                                                                                                                                                

meritless argument that "sexual contact between the parties is a dispositive factor in  

                                                                                                                                                            

determining [the] date of separation").  

                                                



                                                                             -5-                                                                      7070
  


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

trial, the evidence supports using the date of divorce, and at the October 25 mediation                                                                                                                                                                                                               



both parties believed the divorce trial would commence in a few months when in fact it                                                                                                                                                                                                                                                                                                                                      



began in May 2013 and concluded in February 2014.                                                                                                                                                                                                                  But the record reflects that when                                                                                                    



James left to fish in July 2012 - and certainly by October 25 when Dea and James                                                                                                                                                                                                                                                                                                                    



 entered into their mediated agreement -there was no real hope ofreviving the marriage.                                                                                                                                                                                                                                                                                                                                                 



They   attended   mediation   in   part   to   impose   order   on   their   contentious   relationship,  



agreeing on "boundaries" with respect to each other's privacy and new                                                                                                                                                                                                                                                                         romantic partners   



and setting rules pending a final divorce.                                                                                                                    



                                                                 In fixing the date of economic separation, the superior court discussed                                                                                                                                                                                                                                          



relevant Alaska case law, noted "thefact that the parties are economically interdependent                                                                                                                                                                                                                                                                  



or that their finances remain commingled does not, of itself, mean that the 'marital                                                                                                                                                                                                                                                                                                       



 economic unit'/'marital enterprise' continued," and thoroughly explained its reasoning.                                                                                                                                                                                                                                                                                                                                                



We conclude that the superior court did not abuse its discretion by determining that the                                                                                                                                                                                                                                                                                                                            



parties ceased functioning as a joint marital unit on October 25, 2012.                                                                                                                                                                                                                                               



                                 B.                              Marital Property   



                                                                 The equitable distribution of the marital estate involves three basic steps:                                                                                                                                                                                                                                                                                           



"(1) [identifying]what                                                                                       specificproperty                                                                   isavailablefor distribution, (2) findingthevalue                                                                                                                                                         

                                                                                                                                                                                                                                                                                 7   "Factual findings supporting  

of the property, and (3) dividing the property equitably."                                                                                                                                                                                                                                                                                                                     



marital  property  distribution  'must  be  sufficient  to  indicate  a  factual  basis  for  the  

                                                                                                                                                                                                                                                                                                                                                                                                                 

conclusion reached.' "8  

                                                                                                       



                                                                 Because we are remanding to the superior court for further findings and  

                                                                                                                                                                                                                                                                                                                                                                                                                 



clarification about a number of issues, including:  (1) the identification and valuation of  

                                                                                                                                                                                                                                                                                                                                                                                                                         



                                 7                              Beals v. Beals                                                        , 303 P.3d 453, 458 (Alaska 2013).                                                                                                       



                                 8  

                                                                                                                                                                                                                                                                                                                                                                                               

                                                                Pfeil v. Lock, 311 P.3d 649, 653 (Alaska 2013) (quoting Cartee v. Cartee,  

                                                                                                                                    

239 P.3d 707, 713 (Alaska 2010)).  



                                                                                                                                                                                                           -6-                                                                                                                                                                                              7070
  


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

certain   marital   property;   (2)   Dea's   alimony  requests;   and   (3)   the   impact   of   tax  



consequences on the equitable distribution of the parties' marital property, we do not                                                                                                 



reach the question whether the court's equal division of marital property was within the                                                                                                

bounds of its discretion.                            9  



                              1.	           Identification and valuation  

                                                                                        



                             The superior court's identification of property available for distribution is  

                                                                                                                                                                                           

reviewed for clear error.10  

                                                                                                                                                                           

                                                         Generally "only property created by theenterprise of marriage  



                                                                          11  

                                                                                                                                                                                 

. . . should be subject to division."                                           Identification of some property may present issues  



                                                                                 12  

                                                                                                                                                                              

of  law  that  are  reviewed  de  novo.                                                  The  valuation  of  marital  assets  is  a  factual  



                                                                                    13  

                                                                                                                                                                                 

determination reviewed for clear error.                                                 With this standard of review in mind, we affirm  



                                                                                                                                                                                        

the superior court's identification and valuation of the parties' marital property, with the  



                       

following exceptions.  



                                                                                                                                                                                       

                                            a.	            It was clearly erroneous to give James a credit for his  

                                                                                                                                             

                                                           2013 personal income tax liability.  



                                                                                                                                                                           

                             The superior court  gave James a $33,274 credit for his 2013 personal  



                                                                                                                                                                             

income tax liability.  But the court chose October 25, 2012 as the date of the parties'  



                                                                                                                                                                             

economic separation.  Therefore any income James earned in 2013 is separate income,  



               9             See Stevens v. Stevens                             , 265 P.3d 279, 289 (Alaska 2011) (per curiam)                                               



("Because   we   are   remanding  the   case   for   revaluation   of   the   real   property   and   the  

vehicles, the               trial court will have to also makeanewequitabledistribution determination,                                                         

and it is free to reevaluate all of its rulings in light of new evidence.").                                                    



               10            See Limeres v. Limeres, 320 P.3d 291, 296 (Alaska 2014).  

                                                                                                                                                



               11            Schanck v. Schanck, 717 P.2d 1, 2 (Alaska 1986).  

                                                                                                                             



               12            See Tybus v. Holland, 989 P.2d 1281, 1284 (Alaska 1999).  

                                                                                                                                                 



               13            Beals v. Beals, 303 P.3d 453, 459 (Alaska 2013).  

                                                                                                                            



                                                                                            -7-	                                                                                   7070
  


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

                                  14  

not marital,                            and on appeal both Dea and James agree that James should not have                                                                                                                             



received this credit.                                    James argues that because the equalization payment to correct this                                                                                                               



error is only 1.9% of Dea's total property award, the error is harmless.                                                                                                                              But James's tax                       



credit improperly reduced the value of the marital estate available for distribution and                                                                                                                                                 



should be corrected, especially in light of our remand on other issues discussed below.                                                                                                                                                                

Accordingly we remand this issue for the superior court to correct.                                                                                                                         15  



                                                        b.	                It was clearly erroneous not to identify James's potential  

                                                                                                                                                                                                                          

                                                                           PERS health benefit as marital property.  

                                                                                                                                                                          



                                      "To the extent [retirement health benefits] are earned during marriage, they  

                                                                                                                                                                                                                                         

are marital property."16   The superior court made no findings about James's non-vested  

                                                                                                                                                                                                                     



but potential PERS retirement health benefit.  In Thomas v. Thomas we considered how  

                                                                                                                                                                                                                                        



to value a spouse's non-vested pension when the spouse needed to work one of the  

                                                                                                                                                                                                                                           



                   14	                See Pfeil v. Lock                              , 311 P.3d 649, 653 (Alaska 2013).                                              



                   15                 James also argues in his appellee's brief that the superior court should not                                                                                                                         



have  allowed  Dea  to  file  a  joint  2012  tax  return  and  that  this  tax  issue  should  be  

                                                                                                                                                                                                                                            

addressed on remand. We reject James's argument; if James wished to contest this issue                                                                                                                                                

on appeal, he should have filed a cross-appeal.                                                                                     See  Alaska R. App. P. 212(c)(1)(F) ("In                                                             

cases of cross-appeal, the cross-appellant may present a statement of the issues presented  

                                                                                                                                                                                                                         

for review which would require determination if the case is to be reversed and remanded  

                                                                                                                                                                                                                        

for further proceedings in the trial court."); Andersen v. Edwards , 625 P.2d 282, 285  

                                                                                                                                                                                                                                         

(Alaska1981)(refusingtoconsiderappellee's argument because"[a]ppelleeneither filed  

                                                                                                                                                                                                                                        

a cross-appeal nor a cross-statement of points in appellant's appeal," and " '[o]rderly  

                                                                                                                                                                                                                      

procedure will not permit an appellee to attack a judgment for the first time in his brief                                                                                                                                             

in the appellant's appeal' " (quoting                                                                     Alaska Brick Co. v. McCoy                                                        , 400 P.2d 454, 457                           

(Alaska 1965))).   



                   16                Engstrom v. Engstrom, 350 P.3d 766, 770 (Alaska 2015) (citing Hansen  

                                                                                                                                                                                                                              

v. Hansen, 119 P.3d 1005,1014-16 (Alaska 2005)).  

                                                                                                                            



                                                                                                                      -8-	                                                                                                            7070
  


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

                                                                                                                                                  17  

following three years to vest but testified it was "highly improbable" she would do so.                                                                



                                                                                                                                                

We explained that "when it is apparent . . . that a non-vested pension will not vest," the  



                                                                                                                                                 

pension may either be forfeited or the employee's contributions to the pension may be  

                 18   But because the superior court in  Thomas applied a present value to the  

refunded.                                                                                                                                       



pension without making findings on whether the pension would be refunded or forfeited  

                                                                                                                                       

if it did not vest, we remanded for the court to clarify its valuation of the pension.19   We  

                                                                                                                                                



stated that unless there is a finding that a pension will not vest, it is clearly erroneous not  

                                                                                                                                                

to reserve jurisdiction over it.20  

                                                



                       Dea argues the court should have retained jurisdiction over this benefit.  

                                                                                                                                                       



Dea notes that although James quit his State snow-plowing job, nothing prevents him  

                                                                                                                                              



from returning to work and vesting, at which point Dea would be eligible for a portion  

                                                                                                                                         



of that benefit because James earned it during the scope of their marriage. James argues  

                                                                                                                                          



that Dea did not raise this issue or present proof on it below, and that it is therefore  

                                                                                                                                     



waived.  James is incorrect.  Dea included James's retirement health benefit as marital  

                                                                                                                                     



property on her spreadsheet, noting that James had not yet vested but that the benefit  

                                                                                                                                         



should be "valued upon vesting at a future hearing."   At trial Miller testified James  

                                                                                                                                          



needed about four more years to vest and recommended that James's retirement health  

                                                                                                                                           



benefit be divided through a qualified domestic relations order (QDRO).  The superior  

                                                                                                                                       



court divided James's PERS pension through a QDRO, but it did not allocate James's  

                                                                                                                                       



retirement health benefit even though Miller testified at some length on this issue.  We  

                                                                                                                                               



therefore remand for the superior court to address this apparent oversight.  

                                                                                                               



            17         815 P.2d 374, 375 (Alaska 1991).                



            18  

                                  

                       Id . at 376.  



            19  

                                  

                       Id . at 375-76.  



            20  

                                                                                                                           

                       See id. (citing Laing v. Laing, 741 P.2d 649, 657 (Alaska 1987)).  



                                                                        -9-                                                                 7070
  


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

                                                                                                                        

                              c.	       The  identification  and  valuation  of  the  joint  fishing  

                                                                                                                

                                        account and James's annual cash flows are unclear.  



                                                                                                                    

                                        i.	       Miller's  cash  flow  and  bank  account  valuation  

                                                  methods  



                                                                                                                              

                    Dea's  financial  expert,  Sheila  Miller,  prepared  a  report  based  on  tax  



                                                                                                                          

records, bank statements, and other documents generated during the divorce.  Miller  



                                                                                                                     

treated all income between 2011 and 2013 as marital, but valued each party's individual  



                        

bank accounts as of January 1, 2011.  She captured "transfers from joint accounts into  



                                                                                                                      

individual accounts" using annual cash flowsummaries for Dea and James and identified  



                                                                                                 

these transfers as marital property on Dea's proposed property spreadsheet.  



                                                                                                               

                    Miller explained how she formulated the cash flows using James's 2011  



                                                                                                                            

cash flow as an example:  "[After considering] marital and business expenses . . . James  



                                                                                                                                     

had available to him $158,000. . . . [I] put [that amount] as an asset on the property table.  



                                                                                                                            

It's the cash flow that he collected from the business[es]."  Miller testified that her 2011  



                                                                                                                             

cash flow analysis for James represented "the money that he received - the net cash  



                                                                               

flow that [James] received from his work efforts in 2011."  



                                                                                                                        

                    Milleralsoexplained howshepreparedDea's propertyworksheet. Because  



                                                                                                                   

Dea took funds from a joint account and transferred them to her personal account in  



                                                                                                                                 

January 2011, Miller valued that personal account as of January 2011 and allocated it to  



                                                                                                                                 

Dea as part of the marital estate.  Miller then explained that she used a valuation date of  



                                                                                                                               

December 2013 for other accounts. Miller determined that the money going into and out  



                                                                                                                            

of those accounts was marital and was used to pay marital debts; the December 2013  



                                                                   

balance represented "the remaining marital balance."  



                                                                                                                               

                    To ensure it understood Miller's valuation methods, the court asked her  



                                                                                                                          

why she had valued four accounts as of 2011 "and everything else, 2013?"   Miller  



                                                                                                                                     

repliedthat the 2011 accounts were appropriatedby theparties "individuallyon that date.  



                                                              -10-	                                                        7070
  


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

Everything that was used since then - all of the accounts that were used solely for                                                                                        



marital   purposes,   between   January   1   of   2011   and  December   31   of   2013,   I   used   a  

December 31, 2013 date."                              21  



                                                           

                            The court then stated:
  



                                                                                                                                    

                           If I understand your answer correctly, those four accounts
  

                                                                                                                                                  

                           were, in your review of the . . . financial records . . . one or
  

                                                                                                                                               

                           the other party took those, put them in a separate account and
  

                                                                                                                                          

                           used them for separate purposes, and so you treated those,
  

                                                                                                      

                            essentially, as taking a marital asset already?
  



                                                

                                         . . . .  



                                                                                                                                           

                           And then the others were joint - stayed joint, and, so, that's  

                                                                                                       

                           why you kept them joint all the way through?  



                                                                                                                                                                       

Miller responded affirmativly, noting she had treated the marital accounts each party  



                                                                                                                                   

appropriated in 2011 "as a disposition of marital assets prior to trial."  



                                                                                                                                                                 

                                                       ii.	         Miller's  testimony  regarding  the  joint  fishing  

                                                                                                                                               

                                                                    account and James's annual cash flows  



                                                                                                                                                                     

                           James and Dea had a joint fishing account.  According to Miller, James  



                                                                                                                                                                

transferredabout$50,000 fromthe joint fishing account intooneofhis personal accounts  



                                                                                                                                                                        

(account 1) in January 2011, and in August 2011 James transferredanother $77,000 from  



                                                                                                                                          

the joint fishing account into a different personal account (account 2).  



                                                                                                                                                                              

                           When the court noted Dea's property spreadsheet had a zero for account 1,  



                                                                                                                                                                                   

Miller replied: "[T]he balance in the account is not zero, but, I've included it elsewhere."  



                                                                                                                                                                           

The court then asked whether James's personal account 1 was "a zero as part of the  



                                                                                                                                                                          

marital estate," and Miller replied:  "Yes . . . because I've captured that number."  The  



              21            Cf. Schaub v. Schaub                        , 305 P.3d 337, 344 (Alaska 2013) ("Marital assets                                           



that are spent after separation for . . . normal living expenses are not typically taken into                                                                             

account in the final property division." (alteration in original) (quoting                                                                             Partridge v.   

Partridge, 239 P.3d 680, 692 (Alaska 2010))).                                  



                                                                                     -11-	                                                                             7070
  


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

                                                                                                                          

court responded, "[m]y spreadsheet is the value to the marital estate," to which Miller  



                  

responded affirmatively.  



                                                                                                                          

                    The court later stated:   "There was a line on the old spreadsheet called  



                                                                                                                     

'2012 fishing profits.'  The husband said zero; the wife had a value.  Given [Miller's]  



                                                                 

testimony, she is now saying it is in other accounts in other ways."  Miller agreed that  



                                                                                                                            

"the 2012 fishing profits" could be taken off the spreadsheet because of "all the other  



                                                                                                                       

work" that Miller did, but she never testified that the 2012 fishing profits were included  



                                                                                                                               

in other bank accounts in other ways; the "other work" to which Miller referred was her  



                                                                                                                            

cash flow summary.   Miller emphasized that when James took funds from the joint  



                                                                                                                       

fishing account and placed them in his personal accounts, these amounts were captured  



                                                                                                                               

in her cash flow analysis rather than her bank account valuations.  She testified that her  



                                                                                                                           

bank account valuations were "estimates" but that her cash flow summaries on Dea's  



                                                                       

marital property spreadsheet were "accurate."  



                                                                                                                                  

                    Because Miller's proposed spreadsheet did not give James's account 2 a  



                                                                                                                                     

value, the court asked if that account could be taken off Dea's property spreadsheet.  



                                                                                                                                    

Miller replied:  "I treated [account 2] as [James's], because I captured his cash flow . . .  



                                                                                                                                 

rather than doing the account."  (Emphasis added.)  The court responded:  "[I]t's in  



                                          

other accounts . . . right?"  Miller confirmed only that James's earnings were captured  



                                                                                                                        

by her cash flow analysis, not that they were contained in her valuations of the parties'  



         

bank accounts.  



                                                                                                                            

                    Miller had earlier testified that James's net cash flow summary for 2012  



                                                                                                                                

was $102,850. Most of the income was from commercial fishing, but some was from his  



                                                                                                                                     

oil spill response contract.  James started his 2012 commercial fishing season in July.  



                                                                                                                              

Afterward he attended the October 25, 2012 mediation session with Dea, agreeing that  



                                                        

any future earned income would be separate.  



                                                              -12-                                                         7070
  


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

                                                                                                                                                                      iii.	                                    Given   the   superior   court's   determination   of  the  

                                                                                                                                                                                                               parties' economic separation date, the valuation of                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                               James's 2012 income may be clearly erroneous.                                                                                                                                                                                                     



                                                                                   The superior court completely adopted Miller's testimony to value the                                                                                                                                                                                                                                                                                                                                                                             



marital bank accounts, but it did not adopt Miller's recommendations concerning the                                                                                                                                                                                                                                                                                                                                                                                                                                                  



parties' net cash flows. The court reasoned that the cash flows were captured in Miller's                                                                                                                                                                                                                                                                                                                                                                                                             



bank account valuations.                                                             



                                                                                   Dea argues that the court misconstrued Miller's testimony because her                                                                                                                                                                                                                                                                                                                                                                             



valuations of the parties' bank accounts were reliable only if the court also accepted                                                                                                                                                                                                                                                                                                                                                                                                         



Miller's valuations of the parties' cash flows.                                                                                                                                                                                                                                               Because the court credited only half of                                                                                                                                                                                                    



Miller's testimony, Dea contends James was awarded "a substantial windfall."                                                                                                                                                                                                                                                                                                                                                                                                                                            Dea  



 argues the court undervalued James's earnings, some of which were marital.                                                                                                                                                                                                                                                                                                                                                                                                                                James  



responds that Dea cannot claim error on appeal because the superior court adopted her                                                                                                                                                                                                                                                                                                                                                                                                                                                



 expert's bank account valuations.  The court did not identify the cash flows as marital                                                                                                                                                                                                                                                                                                     



property, James argues, because this would have double-counted James's income.                                                                                                                                                                                                                                                                                                                                                                                            



                                                                                   Under thesuperior                                                                                                 court's analysis                                                                                  James's2012fishingprofitswould                                                                                                                                                                                     have  



been marital because they were earned before October 25, 2012, but the court did not                                                                                                                                                                                                                                                                                                                                                                                                                                                 



value them at all, interpreting Miller's testimony to mean that those earnings were                                                                                                                                                                                                                                                                                                                                                                                                                                   



 included in "other accounts." The court further reasoned that "Miller's analysis rests on                                                                                                                                                                                                                                                                                                                                                                                                                                              



the assumption that all of the income earned by the parties was marital.                                                                                                                                                                                                                                                                                                                                                                                            But the cash                                          



 flows included income clearly personal to James, including most importantly his income                                                                                                                                                                                                                                                                                                                                                                                                                   



 as an employee of the State of Alaska."  James quit his State job in late October 2013,                                                                                                                                                                                                                                                                                                                                           



but anything he earned before October 25, 2012 would have been marital property, not                                                                                                                                                                                                                                                                                                                                                                                                                                                 

James's separate property.                                                                                                                                           22  



                                          22                                       See Pfeil v. Lock                                                                                            , 311 P.3d 649, 653 (Alaska 2013) ("Marital property                                                                                                                                                                                                                                            



                                                                                                                                                                                                                                                                                                                                                                                                                                                                      (continued...)  



                                                                                                                                                                                                                                                                -13-	                                                                                                                                                                                                                                                                                   7070  


----------------------- Page 14-----------------------

                                                                          We note that in May 2013 James valued his accounts 1 and 2 together at                                                                                                                                                                                                                                                                                                                                   



roughly $167,000, listing them as fishing profits from 2010 to 2012.                                                                                                                                                                                                                                                                                                                            This is a greater                              



 sum than the $71,376 value the court gave the parties' joint fishing account.                                                                                                                                                                                                                                                                                                                                                                     At one   



point the parties apparently agreed that account 1 contained about $110,000, but the                                                                                                                                                                                                                                                                                                                                                                                       



 court valued this account at zero, and it did not include James's personal account 2 on                                                                                                                                                                                                                            



its final property spreadsheet. We also note that by James's May 2013 calculation, about                                                                                                                                                                                                                                                                                                                                                                       



 $1,800,000 of total marital property was available for distribution; but by the court's                                                                                                                                                                                                                                                                                                                                                              



 calculation,  the   amount   was   about   $1,700,000.     The   difference   between   James's  



valuation and the court's is about $100,000, corroborating Miller's testimony that James                                                                                                                                                                                                                                                                                                                                                                    



had a net cash flow in 2012 of about $100,000.                                                                                                                                                              



                                                                          It appears that when the court removed the 2012 fishing profits from the                                                                                                                                                                                                                                                                                                                         



property spreadsheet - reasoning that James's account 1 and account 2 were "part of   



 other accounts" - it deprived the marital estate of substantial assets because Miller                                                                                                                                                                                                                                                                                                                                                                   



 captured them in her cash flow analysis and not in her bank account values.                                                                                                                                                                                                                                                                                                                                                             Whether  



these accounts were properly identified and valued present close questions of fact.                                                                                                                                                                                                                                                                                                                                                                                    We  



remand this issue for further consideration to ensure that the pre-October 25, 2012                                                                                                                                                                                                                                                                                                                                                                            



marital income was properly identified and valued.                                                                                                                                                                                               



                                                                                                               d.	                                  There are insufficient findings to determine whether the                                                                                                                                                                                                                                                               

                                                                                                                                                    smaller account was properly valued.                                                                                                                                            



                                                                          Dea argues that the court awarded her an account valued at $4,350 but that                                                                                                                                                                                                                                                                                                                     



the account was actually worth only $800 because James withdrew about $3,500 from                                                                                                                                                                                                                                                                                                                                                                                 



it to pay income taxes.                                                                                                      Dea bases her argument on Miller's trial testimony.                                                                                                                                                                                                                                           The court's   



                                     22                                   (...continued)  



                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

includes all property acquired duringthemarriage, excepting only inherited property and  

                                                                                                                                                                                                                                                                                                                                                                                                                                 

property acquired with separate property." (quoting Schmitz v. Schmitz, 88 P.3d 1116,  

                                                                                                                                                                                                                                                                     

  1125 (Alaska 2004)) (internal quotation marks omitted)).  



                                                                                                                                                                                                                                     -14-	                                                                                                                                                                                                                          7070
  


----------------------- Page 15-----------------------

property spreadsheet accurately notes Miller's testimony valuing the account at $800                                                                                                                          



alongside James's suggested value of $4,350.                                                                           The court's notation for that row reads                                                



"[Dea] corrected at trial," when in fact Miller corrected James's valuation of this account                                                                                                             



at trial.           It is unclear why the court credited James's value of this account when Miller's                                                                                                   

testimony was unrefuted, and on remand the court should explain its reasoning.                                                                                                                            23  



                                  2.	              Distribution  



                                  We review the superior court's equitable distribution of property for abuse  

                                                                                                                                                                                                             

of discretion.24  "While the trial court [does not need to] make findings pertaining to each  

                                                                                                                                                                                                                



 [statutory]  factor,  its  findings  must  be  sufficient  to  indicate  a  factual  basis  for  the  

                                                                                                                                                                                                                   



conclusion reached. Whe[n] the trial court makes these threshold findings, we generally  

                                                                                                                                                                                                    

will not reevaluate the merits of the property division."25  

                                                                                                                   



                                                   a.	              It   was   an   abuse   of   discretion   to   ignore   the   tax  

                                                                                                                                                                                                                

                                                                    consequences of selling certain marital property.  

                                                                                                                                                                              



                                  The superior court does not need to consider speculative tax consequences  

                                                                                                                                                                                         



that may arise from its division of marital property, but when it "orders that property be  

                                                                                                                                                                                                                      



distributed in a way that creates an immediate and specific tax liability . . . the court is  

                                    



                 23               See Stanhope v. Stanhope                                          , 306 P.3d 1282, 1287 (Alaska 2013) (" '[T]he                                                          



trial   court   must   render   findings   of   ultimate   fact   that   support   any   decreed   property  

division; the findings must be explicit and sufficiently detailed to give this court a clear                                                                                                                  

understanding of the basis of the trial court's decision.' " (quoting                                                                                                     Beals v. Beals, 303  

P.3d 453, 458-59 (Alaska 2013))).                                  



                 24               Engstrom v. Engstrom, 350 P.3d 766, 769 (Alaska 2015).  An abuse of  

                                                                                                                                                                                                                      

discretion occurs in this context when the superior court "considers improper factors,  

                                                                                                                                                                                                        

fails to consider relevant statutory factors, or assigns disproportionate weight to some  

                                                                                                                                                                                                              

factors while ignoring others."  Id . (quoting Hansen v. Hansen, 119 P.3d 1005, 1009  

                                                                                                                                                                                                              

(Alaska 2005)).  

                      



                 25               Stanhope, 306 P.3d at 1289 (quoting Cartee v. Cartee, 239 P.3d 707, 713  

                                                                                                                                                                                                                              

(Alaska 2010)).  

                      



                                                                                                         -15-	                                                                                                 7070
  


----------------------- Page 16-----------------------

                                                                             26  

required to consider that liability."                                              The party seeking to equitably allocate the tax                                                  



consequences must present "proof that a taxable event will occur in connection with the                                                                                              

                                               27    The reason for considering these tax consequences is that they  

division of property."                                                                                                                                                            



"may alter the effective terms of a particular [property] division so substantially as to  

                                                                                                                                                                                       

make an otherwise equitable division inequitable."28  

                                                                                   



                             Dea argues that by failing to account for the tax consequences fromher sale  

                                                                                                                                                                                   



of heavy equipment during the divorce trial, the court unbalanced its 50/50 marital  

                                                                                                                                                                            



property distribution.  Dea also argues that the court should have accounted for the tax  

                                                                                                                                                                                     



consequences she would incur by selling both the gravel pit property and the B&B  

                                                                                                                                                                               



because the court knew when it awarded them to her that she would have to sell those  

                                                                                                                                                      



properties.  



                                                          i.	           Tax           consequences                       of       equipment                    sold         before  

                                                                                                                                                                          

                                                                        property division and of corporation  

                                                                                                                                  



                             In August 2013 Dea told the court she planned to sell an excavator, a trailer,  

                                                                                                                                                                            



and a dump truck for $54,500. The equipment was held by the couple's corporation. In  

                                                                                                                                                                                       



an earlier June letter  James's lawyer had informed Dea's lawyer "that most of the  

                                                                                                                                                                                    



construction equipment is fully depreciated, and when Dea sells any piece of equipment  

                                                                                                                                                                     



she must reserve a large portion of the proceeds so she can pay capital gains taxes."  

                                                                                                                                                                            



(Emphasis added.) Dea emailed James the offer details, and James agreed to it. Dea then  

                                                                                                                                                                                  



sold the equipment. Afterwards James argued to the superior court that Dea should bear  

                                                                                                                                                                                  



               26            Oberhansly v. Oberhansly                                  , 798 P.2d 883, 887 & n.4 (Alaska 1990);                                                       cf.  



Dodson v. Dodson                        , 955 P.2d 902, 909 (Alaska 1998) (holding that superior court did not                                                                       

abuse its discretion by considering tax liability in connection with division of marital                                                                                    

property when tax's "precise magnitude" was "unpredictable").                                        



               27            Oberhansly, 798 P.2d at 887.  

                                                                                   



               28	           Id .  



                                                                                         -16-	                                                                                  7070
  


----------------------- Page 17-----------------------

the tax consequences of this sale.                                                                                      Dea asked the court to equitably divide the tax                                                                                                            



consequences.   The court approved the sale in early October 2013, writing that it "will                                                                                                                                                                                     



address distribution of the proceeds at trial."                                                                                 



                                            In its final property division the court awarded the equipment sale proceeds                                                                                                                                         



to Dea, but it did not account for the sale's tax consequences.                                                                                                                                              Both parties understood                     



the sale had tax consequences, but the superior court was presented with no evidence on                                                                                                                                                                                               



what those consequences would be. We have explained that in this situation, "the proper                                                                                                                                                                                  



course [is] for the court to . . . order the parties to present points and authorities or                                                                                                                                                                                             

introduce expert testimony to support their positions about the tax effects."                                                                                                                                                                           29  



                                            The  superior  court  determined  that  "any  issues  regarding  the  tax  

                                                                                                                                                                                                                                                                                 



consequences of the [equipment] sale are moot, since Dea will receive the [proceeds] and  

                                                                                                                                                                                                                                                                                  



so will have to deal with any such tax consequences."  But "tax debts are incurred when  

                                                                                                                                                                                                                                                                            

a taxable event occurs, and not when a formal tax return is filed."30                                                                                                                                                          By ordering Dea to  

                                                                                                                                                                                                                                                                                        



shoulder the full tax consequences of the equipment sale, the court burdened her with  

                                                                                                                                                                                                                                                                 



what is likely a substantial liability.  It was an abuse of discretion to disregard the effect  

                                                                                                                                                                                                                                                                            



of these tax consequences on the marital property distribution.   Because the parties  

                                                                                                                                                                                                                                                                       



agreed  to  sell  this  marital  property  prior  to  the  court's  property  division,  the  tax  

                                                                                                                                                                                                                                                                                  

consequences of this sale should have been treated as a marital debt.31  

                                                                                                                                                                                                                  



                      29                    Id . at 888.                          While expert testimony is helpful to the resolution of such                                                                                                                                 



issues, it is by no means necessary.                                                                                  See id                 . at 886.     



                      30                    2 T        URNER,  supra  note 2,  8.28, at 913 n.22;                                                                                            see also id                         . ("A contrary rule                            



would encourage delayed filing of tax returns in order to avoid consideration of tax                                                                                                                                                                                               

consequences in the divorce case.").                                                           



                      31                    Id. at 913-14 (noting that when a sale of marital property occurs before the  

                                                                                                                                                                                                                                                                                    

property division "unpaid capital gains taxes are for all practical purposes an outstanding  

                                                                                                                                                                                                                                                        

debt, and they should be classified and allocated between the parties" like any other  

                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                  (continued...)  



                                                                                                                                         -17-                                                                                                                                 7070
  


----------------------- Page 18-----------------------

                                The superior court's order also states that Dea received the corporation's                  



assets and that "James no longer has any interest in the corporation." We understand this                                                                                                                



order to mean that Dea was awarded ownership of the corporation. The parties presented                                                                                                     



very little evidence on the corporation's outstanding equities and liabilities. On remand                                                                                                       



the court also should account for any differences between these outstanding values and                                                                                                                   

the tax consequences of the equipment sale.                                                               32  



                                                                 ii.             Tax consequences of pit property sale  

                                                                                                                                                                         



                                In November 2013 Dea informed the court of an offer to purchase the pit  

                                                                                                                                                                                                           



property for $138,000, asking the court to permit a sale and equitably allocate the "sale  

                                                                                                                                                                                                      



and tax" impact. James opposed, arguing he needed either the pit property or the marital  

                                                                                                                                                                                                 



residence with its adjacent shop for his fishing equipment and that he should not bear any  

                                                                                                                                                                                                         



of the sale's tax consequences.  Dea responded that the pit property was subject to a  

                                                                                                                                                                                                               



performance deed of trust requiring a structure to be erected on the property by August  

                                                                                                                                                                                                



2014 and that, given this encumbrance, a second offer was unlikely.  

                                                                                                                                                



                                In February 2014 Dea testified that the offer still was outstanding.  The  

                                                                                                                                                                                                       



court then asked Dea whether the pit property was worth $138,000, and she agreed to  

                                                                                                                                                                                                             



this value.  Dea also submitted an exhibit Miller had prepared on the tax consequences  

                                                                                                                                                                                



of selling the pit property listing transactional costs and tax consequences between  

                                                                                                                                                                                             



roughly $8,000 and $11,000.  In April 2014 the court awarded Dea the pit property,  

                                                                                                                                                                                           



basing its value on the $138,000 offer, but disregarded any transaction costs or tax  

                                                                                                                                                                                                          



consequences from the likely sale.  

                                                                         



                31               (...continued)  



                   

marital debt).  



                32  

                                                                                                                                                                                         

                                 Cf. Root v. Root, 851 P.2d 67, 69 (Alaska 1993) (holding that if significant  

                                                                                                                                                                                                        

marital asset has been identified but no evidence has been presented as to its value, "the  

                                                                                                                                                                                              

best practice is for the trial court to direct the parties . . . to fill the evidentiary void").  



                                                                                                    -18-                                                                                              7070
  


----------------------- Page 19-----------------------

                                                          About eight months after the court's final property division, Dea sold the                                                                                                                                                                                                                                        



pit property.                                           On these facts it was an abuse of discretion to not factor into the property                                                                                                                                                                                                                



division the tax consequences and transactional costs from the pit property sale.                                                                                                                                                                                                                                                                                    Dea  



presented specific evidence on this issue, the court based its value on the $138,000 offer,                                                                                                                                                                                                                                                                        



the court awarded the pit property to Dea because she could sell it easily to finance her                                                                                                                                                                                                                                                                                   



move to Oregon, and Dea in fact sold the property. There was nothing speculative about                                                                                                                                                                                                                                                                            

whether a sale would occur or what the likely tax consequences would be.                                                                                                                                                                                                                                                             33  



                                                                                                                     iii.                         Tax consequences of B&B sale                                                                                                



                                                           In August 2013 Dea asked the court to authorize a sale of the marital B&B                                                                                                                                                                                                                               



                                                                                                                                                                                                                                                                                                                                                                        

where James was living.  Dea wanted the "net sale proceeds" to be "placed on her side  



                                                                                                                                                                                                                                                                                                                                                                                 

of the ledger.  But James responded that the gross sales proceeds should be allocated to  



                                                                                                                                                                                                                                                                                                                                                                              

Dea, acknowledging that the B&B was "depreciated to the fullest extent allow[ed] by  



 federal income tax law."                                                          



                                                                                                                                                                                                                                                                                                                                                                         

                                                           The  court  ruled  that  Dea  could  sell  the  B&B.                                                                                                                                                                                          James  moved  for  



                                                                                                                                                                                                                                                                                                                                                                           

reconsideration, arguing it was improper to authorize a pre-divorce sale against his  



                                                                                                                                                                                                                                                                                                                                                                          

wishes.   Dea responded that both of James's property tables listed the B&B in her  



                                                                                                                                                                                                                                                                                                                                                        

column.  Dea also stated she did not want to operate the B&B in the future and implied  



                                                                                                                                                                                                                                                            

it was hard to sell property in Cordova's small real estate market.  



                             33                           SeeOberhansly                                                       ,798                  P.2dat 887                                       (holding that whenproofis                                                                                           presented "that  



a taxable event will occur in connection with the division of [marital] property," the                                                                                                                                                                                                                                                                                     

 superior court shouldaccount                                                                                                   forthesetaxconsequences                                                                                           inits                 marital property division);   

see also McDaniel v. McDaniel                                                                                                           , 829 P.2d 303, 307 (Alaska 1992) (holding transactional                                                                                                                                   

costs of selling awarded marital property should be considered when there is "evidence                                                                                                                                                                                                                                                        

in the record . . . showing [both] that the party who will receive the asset intends an                                                                                                                                                                                                                          

imminent sale, and . . . the estimated costs of sale" (quoting                                                                                                                                                                                                   In re Marriage of Berg                                                                               , 737   

P.2d 680, 683 (Wash. App. 1987))).                                                                                        



                                                                                                                                                                                     -19-                                                                                                                                                                            7070
  


----------------------- Page 20-----------------------

                                                           On   reconsideration   the   court   recognized   the   parties'   dispute   over  tax  



consequences, noting it had earlier ordered that issue resolved at trial "                                                                                                                                                                                                                                                          regardless of   



whether the B&B is sold prior to trial                                                                                                                                  ."  (Emphasis added.)  Stating that James's "real  



issue lies in the tax consequences of any sale" but that he did not wish to be awarded the                                                                                                                                                                                                                                                                                        



B&B, the court permitted Dea to market the B&B and sell it subject to court approval.                                                                                                                                                                                                                                                                                                               



In its final marital property division, the court awarded Dea the B&B, but it did not                                                                                                                                                                                                                                                                                          



account for the tax consequences of a likely sale even though it recognized Dea wanted                                                                                                                                                                                                                                                                        



to sell the B&B, not operate it.                                                                                              



                                                           The court's findings of fact continually reference Dea's impending move                                                                                                                                                                                                                                    



to Oregon.                                       The court awarded Dea the B&B because she could liquidate it fairly easily                                                                                                                                                                                                                                          



to finance her move.  And the court received evidence that the B&B was "depreciated   



to the fullest extent allow[ed] by federal income tax law."                                                                                                                                                                                                                 The parties agreed there                                                                   



would be tax consequences from selling the B&B and the court at one point decided to                                                                                                                                                                                                                                                                                                  



resolve this issue at trial, but it did not account for these tax consequences when it                                                                                                                                                                                                                                                                                                 



awarded Dea the B&B.                                                                                       On these facts it was an abuse of discretion to disregard the                                                                                                                                                                                                        

effect of tax consequences on the marital property distribution.                                                                                                                                                                                                                       34  



                              C.                           It Was Error Not To Resolve Dea's Alimony Request.  

                                                                                                                                                                                                                                                                               



                                                           Alaska has "a policy of encouraging trial courts to provide for parties'  

                                                                                                                                                                                                                                                                                                                                                            

financial needs by property disposition, rather than by alimony."35                                                                                                                                                                                                                                    "When a couple has  

                                                                                                                                                                                                                                                                                                                                                                                



sufficient assets, the spouse with the smaller earning capacity can and should receive a  

                                                                                                                                                                                                                                                                                                                                                                                         



                              34                           See  Oberhansly,  798  P.2d  at  887-88.  



                              35                           Dixon  v.  Dixon,  747  P.2d   1169,   1173  (Alaska   1987).  



                                                                                                                                                                                       -20-                                                                                                                                                                                                   7070  


----------------------- Page 21-----------------------

larger   share   in   the   property   distribution   to   aid   him   or   her   in   [the   post-divorce]  

transition."36  



                      Where  necessary,  spousal  support  of  a  limited  duration  generally  is  

                                                                                                                                           



                                                                                                                                           37  

preferred and it can be characterized as either reorientation or rehabilitative alimony.                                                        

                                                                                                                             

We also have approved extended spousal support,38  and have stated that "permanent  

                                                                                                                           

alimony may be awarded when it is 'just and necessary.' "39                                             Reorientation alimony  

                                                                                                                                 



" 'allow[s] the  requesting spouse an opportunity to adjust to the changed financial  

                                                                                                                                



circumstances accompanyingadivorce,' "but"should ordinarilybeawarded only 'when  

                                                                                                                                     

the property settlement will not adequately meet the parties' reasonable needs.' "40                                                     By  

                                                                                                                                          



contrast rehabilitative alimony does not require a finding that the property division does  

                                                                                                                                       



not adequately account for the parties' needs, and is intended to further one spouse's "job  

                                                                                                                                        



                                                                                                                                           41  

training or other means directly related to entry or advancement within the work force."                                                        

                                                                                                                                 



           36         Day v. Williams            , 285 P.3d 256, 261 (Alaska 2012) (quoting                                Tollefsen v.   



Tollefsen, 981 P.2d 568, 570 (Alaska 1999)).                   



           37         See  Jones  v.  Jones,  835  P.2d  1173,  1179  (Alaska  1992)  ("Either  

                                                                                                                                

rehabilitative alimony or reorientation alimony where appropriate is, in general, to be  

                                                                                                                                          

preferred to permanent alimony because it is generally undesirable to require one person  

                                                                                                                                    

to support another on a long-termbasis in the absence of an existing legal relationship.").  

                                                                                                                      



           38         See, e.g., Gallant v. Gallant, 945 P.2d 795, 801 (Alaska 1997).  

                                                                                                                   



           39         Hilliker v. Hilliker, 755 P.2d 1111, 1112 (Alaska 1988) (quoting former  

                                                                                                                                   

AS 25.24.160(3) (1986)).  

                              



           40         Davila v. Davila, 876 P.2d 1089, 1094 (Alaska 1994) (quoting Richmond  

                                                                                                                              

v. Richmond, 779 P.2d 1211, 1215 n.6 (Alaska 1989), overruled on other grounds by  

                                                                                                                                           

Hansen v. Hansen, 119 P.3d 1005, 1010 & n.16 (Alaska 2005)).  

                                                                                               



           41         Id . (quoting Richmond, 779 P.2d at 1215); see also Barnett v. Barnett, 238  

                                                                                                                                         

P.3d 594, 601 (Alaska 2010) (stating rehabilitative alimony should be granted "to allow  

                                                                                                                                      

a recipient spouse who exits a marriage with few job skills and little earning capacity to  

                                                                                                                                           

                                                                                                                        (continued...)  



                                                                    -21-                                                              7070
  


----------------------- Page 22-----------------------

"The party seeking rehabilitative alimony should present an educational or job training                                                             



plan so that the reviewing court can determine whether a support award is necessary and                                                                    

appropriate."42  



                                                                                                                                                             

                         In her pre-trial brief Dea requested "reorientation alimony to help out in the  



                                                                                                                                                            

transition from [Alaska] to . . . Oregon" and rehabilitative alimony to help with her  



                                                                                                                                                                    

"educational and living costs," promising to provide the superior court a detailed plan.  



                                                                                                                                                           

At  trial  Dea  testified  she  had  applied  to  a  community  college  in  Oregon,  and  she  



                                                                                                                                                             

presented the court with an exhibit documenting her correspondence with the school, the  



                                                                                                                                                           

classes she wished to take, and credit-hour and text book costs.   The court did not  



                                                                                                                                                             

address Dea's alimony request, and she now argues it erred by not doing so. Even if the  



                                                                                                                                                         

superior court intended to deny Dea's alimony request, without factual findings we have  



                                                                                                                                                         

nothing to indicate it considered the issue. Accordingly the court on remand should enter  



                                                                                                                                                              43  

                                                                                                                                                 

appropriate findings of fact and conclusions of law concerning Dea's alimony request. 



            41           (...continued)  



                                                                                                                                                        

secure a means of earned income" (quoting Fernau v. Rowdon, 42 P.3d 1047, 1058  

                 

(Alaska 2002))).  



            42           Tybus v. Holland, 989 P.2d 1281, 1288 (Alaska 1999).  

                                                                                                                    



            43           See Sarah D. v. John D., 352 P.3d 419, 429 (Alaska 2015) (" 'Detailed and  

                                                                                                                                                            

explicit findings' are necessary on appeal to give us 'a clear understanding of the basis  

                                                                                                                                                         

of the trial court's decision, and to enable us to determine the ground on which the trial  

                                                                                                                                                           

court reached its decision.' " (alterations omitted) (quoting Merrill v. Merrill, 368 P.2d  

                                                                                                                                                          

546, 548 (Alaska 1962))); cf. Davila, 876 P.2d at 1094 ("In all cases . . . an award of  

                                                                                                                                                              

alimony must be accompanied by adequate findings, particularly with respect to the  

                                                                                                                                                            

financial needs and abilities of both parties . . . .").  

                                                                                        



                                                                             -22-                                                                       7070
  


----------------------- Page 23-----------------------

             D.	          It Was An Abuse Of Discretion To Order Dea To Pay All Of The                                                                        

                          Children's Visitation Expenses.                                 44  



                                                                                                                                                       

                          "After determining an award of child support . . . the court shall allocate  



                                                                                                                                                          

reasonable travel expenses which are necessary to exercise visitation between the parties  



                                                                                             45  

                                                                                                                                                

as may be just and proper  for them to contribute."                                               The superior court must sufficiently  



                                                                                                   46  

                                                                                                                                                      

explain its reasons for allocating visitation expenses.                                                Factors the court should consider  



                                                                                                          47  

                                                                                                                                                                

include the costs of visitation and the parties' finances.                                                      The superior court does not  



                                                                                                                                        

abuse its discretion by ordering visitation expenses split equally after considering the  



                                                     48  

                                                                                                                                                   

parties' financial situations,                           but on two occasions we have found abuses of discretion  



                                                                                                                                                       

because the superior court burdened one party with full visitation expenses without  



                                                                                             49  

                                                                 

considering that party's financial circumstances. 



                                                                                                                                                                

                          In a related line of cases concerning the best-interest custody factors, we  



                                                                                                                                       

have held that if the superior court finds that a parent has a legitimate reason to move,  



                                                                                                                                                  

it "should not hold the move against the [parent]" because "[l]egitimately motivated  



                                                                                                                 50  

                                                                                                               

moves are a common feature of 'today's mobile society.' " 



             44           SeeC.R.B.           v. C.C.      , 959 P.2d 375,             384-85 (Alaska1998) (establishing                                   abuse  



of discretion standard of review for allocation of visitation expenses),                                                          overruled on other        

grounds by Evans v. McTaggart                                 , 88 P.3d 1078, 1085 (Alaska 2004).                       



             45	          Alaska R. Civ. P. 90.3(g) (emphasis added).  

                                                                                                



             46          Red Elk v. McBride, 344 P.3d 818, 824 (Alaska 2015) (citing Ronny M. v.  

                                                                                                                                                                   

Nannette H., 303 P.3d 392, 407 (Alaska 2013)).  

                                                                               



             47           See id. at 824.  

                                             



             48           See C.R.B., 959 P.2d at 384-85.  

                                                                        



             49           See McBride, 344 P.3d at 824; Ronny M., 303 P.3d at 407.  

                                                                                                                                  



             50          Moeller-Prokosch v. Prokosch, 53 P.3d 152, 155 (Alaska 2002) (quoting  

                                                                                                                                                      

                                                                                                                                            (continued...)  



                                                                               -23-	                                                                        7070
  


----------------------- Page 24-----------------------

                                                                  Here   the   superior   court   concluded   that   "Dea's   move   is  motivated   by  



 appropriate considerations and not by a desire to block James from having contact or                                                                                                                                                                                                                                                                                                  



 time with his children."                                                                                                But the court then ordered that if Dea moved to Oregon, she                                                                                                                                                                                                                                     



would be responsible to "pay the costs oftransportationfor visitation inAlaska,"because                                                                                                                                                                                                                                                                                                             



 "she will have chosen to leave Alaska over James'[s] strong objection and has sufficient                                                                                                                                                                                                                                                                                                   



 cash reserves and incentive to find work that she can afford to pay for the plane tickets."                                                                                                                                                                                                                                                                                                                                                



 Dea moved for reconsideration, but the court denied her motion, writing that "[i]t is not                                                                                                                                                                                                                                                                                                                                



 fair to make James cover any costs associated with [Dea's] move."                                                                                                                                                                                                                                                                    The court explained                                 



 that Dea was "not being penalized; she is being ordered to accept the consequences of                                                                                                                                                                                                             



 a voluntary move she plans to make."                                                                                                                 



                                                                   Characterizing the court's order as a penalty, Dea now argues that she                                                                                                                                                                                                                                                                              



 should not bear the full visitation expenses because she has a lower earning capacity than                                                                                                                                                                                                                                                                                                                          



 James.   We agree with Dea.                                                                                                                   Having found that Dea's move was legitimate, the court                                                                                                                                                                                                           



 then held the move against Dea by ordering her to pay the children's full visitation                                                                                                                                                                                                                                                                                                     



 expenses. This was an abuse of discretion, and we therefore reverse the superior court's                                                                                                                                                                                                                                                                                                               



 visitation expenses order.                                                                                                      On remand the court shall enter a just and proper visitation                                                                                                                                                                                              



 expenses award after considering the parties' relative economic circumstances and the                                                                                                                                                                                                                                                                                                                                    



 costs of visitation.                   



                                 E.	                              James's    Credit    Against    His    Child    Support    Arrearage    Is    Not  

                                                                   Sufficiently Supported By The Record.                                                                                                                            



                                                                  Thesuperior court fixed                                                                                             James's monthly child supportobligationat$2,700                                                                                                                                                                    



 and determined that, from the parties' date of economic separation, James had a $45,900                                                                                                                                                                                                                                                                                                    



                                 50                                (...continued)  



                                                                                                                                                                                                                                                                                                                                                                                                              

Moeller-Prokosch v. Prokosch, 27 P.3d 314, 316 (Alaska 2001)); see also Rego v. Rego,  

                                                                                                                                                                                                                                                                                                                                                                               

 259  P.3d  447,  454  (Alaska  2011)  (stating  that  "we  take  seriously  .  .  .  alleged  

                                                                                                                                                                                                                                         

 infringement[s] on a custodial parent's right to relocate").  



                                                                                                                                                                                                            -24-	                                                                                                                                                                                                  7070
  


----------------------- Page 25-----------------------

arrearage.   But based on Miller's testimony that James paid "marital expenses" in 2012                                                                                                                                                                                                                      



and 2013, the court "deem[ed] th[o]se payments to be payments made in lieu of child                                                                                                                                                                                                                         



support," credited them against his arrearage, and determined that James owed about                                                                                                                                                                                                                       



 $18,200 in child support arrearage.                                                                                                     The court did not further explain the nature of                                                                                                                              



James's payment of "marital expenses."                                                                      



                                                 Dea now argues the court failed to account for the fact that, according to                                                                                                                                   



Miller, $30,000 of the parties' 2012 marital expenses went to pay 2011 income taxes.                                                                                                                                                                                                                                             



Dea argues the court should have relied on a different portion of Miller's report to                                                                                                                                                                                                                                   



calculate James's credit.                                                                   This portion shows that $2,450 from one of the parties' joint   



bank accounts went to "[k]ids['] expenses" in 2012 and 2013. Dea argues the court erred                                                                                                                                                                                                                      



by failing to itemize James's marital expenses, and implies that James should have                                                                                                                                                                                                                          



received a smaller credit against his child support arrearage.                                                                                                                           



                                                  "Whether a [child] support order exists or not, 'a parent is obligated both                                                                                                                                                                                 

                                                                                                                                                                                                                                51  Child support payments  

by statute and at common law to support his or her children.' "                                                                                                                                                                                                                             



                                                                                                                                                                                                                                                                                                                          52  

are meant to "contribute toward the nurture and education of [the parties'] children."                                                                                                                                                                                                                                           

                                                                                                                                                                                  



Child support is defined as "the contribution to a child's maintenance required of both  

                                                                                                                                                                                                                                                                                                               



parents," and it is intended "to ensure that child support orders are adequate to meet the  

                                                                                                                                                                                                                                                                                                                    

needs of children, subject to the ability of parents to pay."53  

                                                                                                                                                                                                  



                         51                       Crayton v. Crayton                                                     , 944 P.2d 487, 489 (Alaska 1997) (alteration omitted)                                                                                                                 



(quoting  Matthews v. Matthews                                                                                       , 739 P.2d 1298, 1299 (Alaska 1987)).                                                                              



                         52                      AS 25.24.160(a)(1); see also Koller v. Reft, 71 P.3d 800, 807 n.24 (Alaska  

                                                                                                                                                                                                                                                                                                   

2003) ("Meeting the needs of children is [a] laudable public policy.").  

                                                                                                                                                                                                                                



                         53                      Alaska R. Civ. P. 90.3 cmt. I.B; see also Hunt v. Hunt, 698 P.2d 1168, 1173  

                                                                                                                                                                                                                                                                                                             

(Alaska 1985) (noting child support payments are intended to "maintain the children's  

                                                                                                                                                                                                                                                                                          

accustomed standard of living").  

                                                                                         



                                                                                                                                                         -25-                                                                                                                                                7070
  


----------------------- Page 26-----------------------

                        The superior court may enter a child support award that is retroactive to the                                                    



                                                        54  

date of the parents' separation.                                                                                                                

                                                            When parents separate and one then provides support  



                                                                                                                                

to the children before a child support order is entered, the superior court's decision  



                                                                                                                                                         

whether to credit the pre-order support against the obligor's arrearage is governed by the  

                                                                                       55   Rule 90.3(c)(1) permits the court to  

                                                                                                                                                          

variation framework of Alaska Civil Rule 90.3. 



"vary the child support award as calculated under the other provisions of this rule for  

                                                                                                                                                         



good cause upon proof by clear and convincing evidence that manifest injustice would  

                                                                                                                                                   



result if the support award were not varied."  We have recently explained that "[t]he  

                                                                                                                                                   

good cause inquiry must focus first and foremost on the needs of the children."56   Under  

                                                                                                                                                   



Rule  90.3(c)(1)  "[t]he  [superior]  court  must  specify  in  writing  the  reason  for  the  

                                                                                                                                                       



variation, the amount of support which would have been required but for the variation,  

                                                                                                                                             



and the estimated value of any property conveyed instead of support calculated under  

                                                                                                           



the other provisions of this rule." (Emphasis added.)  

                                                                                                  



                        The superior court has some discretion to credit pre-order support given  

                                                                                                                                                    



directly to the custodial parent or the children, but as always it must make sufficient  

                                                                                                                                             

findings of fact and conclusions of law to justify the credit.57                                                  On remand the superior  

                                                                                                                                               



court  should  determine  whether  "manifest  injustice  would  result"  if  James's  child  

                                                                                                                                                    



            54          See Ogard v. Ogard                   , 808 P.2d 815, 816 (Alaska 1991);                             see also        Alaska R.   



Civ. P. 90.3 cmt. I.B.           



            55          See Ruppe v. Ruppe, 358 P.3d 1284, 1290-92 (Alaska 2015); see also  

                                                                                                                                                      

 Vachon v. Pugliese, 931 P.2d 371, 382 (Alaska 1996).  

                                                                                        



            56          Ruppe, 358 P.3d at 1291 (emphasis in original) (quoting Koller v. Reft, 71  

                                                                                                                                                          

P.3d 800, 807 (Alaska 2003)) (internal quotation marks omitted).  

                                                                                                       



            57          Id.  at  1291-92;  see  also  Ogard,  808  P.2d  at  816-17;  Alaska  R.  Civ.  

                                                                                                                                                      

P. 90.3(c)(1).  

      



                                                                           -26-                                                                     7070
  


----------------------- Page 27-----------------------

                                                                                                                                            58  

support award is not varied downward to reflect his payment of pre-order expenses.                                                               



                                                             59  

                                                                                                                                          

After "careful scrutiny of the facts,"                          the superior court may credit James against his  



                                                                                                                               

arrearage the portion of his marital expense payments that actually went to the children's  



                                                                                                                  60  

                                                                                                           

needs and interests as opposed to James and Dea's joint marital debt. 



           F.	        The Court Should Revisit Dea's Request For Attorney's Fees After  

                                                                                                                                      

                      Conclusion Of The Proceedings On Remand.  

                                                                                      



                      Attorney's fees in a divorce action are meant to "assure that both spouses  

                                                                                                                                   

have the proper means to litigate the divorce action on a fairly equal plane."61  

                                                                                                                                        The  



                                                                                                                                         

decision to award or deny such fees depends on "the relative economic situations and  



                                                                                                                             62  

                                                                                                                                 Because  

earning powers of the parties," including the distribution of marital property. 



                                                                                                                                         

the  parties'  relative  economic  situations  may  change  after  the  conclusion  of  the  



                                                                                                                             

proceedings on remand, the superior court should reevaluate whether to award Dea  



                         63  

                   

attorney's fees. 



           58         Alaska  R.  Civ.  P.  90.3(c)(1).  



           59         Coats  v.  Finn,  779  P.2d  775,  777  (Alaska   1989).  



           60         See  Alaska  R.  Civ. P. 90.3(c)(1).   James  bears  the  burden  of  proving  his  



entitlement  to  a  credit,  see   Coats,  779  P.2d  at 777 &  n.7,  and  on  remand  the  superior  

court  may  in  its  discretion  receive  new  evidence  on  this  issue.  



           61         Sarah D. v. John D., 352 P.3d 419, 425 (Alaska 2015) (quoting Limeres v.  

                                                                                                                                             

Limeres, 320 P.3d 291, 302 (Alaska 2014)).  

                                                              



           62         Id. (quoting Lone Wolf v. Lone Wolf, 741 P.2d 1187, 1192 (Alaska 1987));  

                                                                                                                                   

see also Siggelkow v. Siggelkow, 643 P.2d 985, 989 (Alaska 1982).  

                                                                                                     



           63         Cf.  Heustess  v.  Kelley-Heustess,  158  P.3d  827,  835  (Alaska  2007)  

                                                                                                                                     

("Because the property division must be vacated, the economic conditions on which the  

                                                                                                                                           

court based its award of attorney's fees may change on remand.").  

                                                                                             



                                                                    -27-	                                                             7070
  


----------------------- Page 28-----------------------

 IV.            CONCLUSION  



                               We   AFFIRM   the   superior   court's   decision   on   the   parties'   economic  



 separation   date,   but   we   REMAND   for   further   proceedings   on   the   superior  court's  



 decisions concerning: (1) the ultimate division of marital property; (2) James's credit for  

                                                                                                                                                                                                 



his 2013 income tax liability; (3) James's PERS health benefit; (4) the valuation of                                                                                                              



 certain marital accounts and cash flows; (5) the tax liabilities associated with marital                                                                                              



property awarded to Dea; (6) Dea's alimony request; (7) James's child support credit;  

                                                                                                                                                                                        



 and (8) Dea's attorney's fees request.   We REVERSE the superior court's visitation  

                                                                                                                                                                                 



 expenses order. We                            otherwise AFFIRMthe                                  superior court's judgment. We                                         do not retain  



jurisdiction.  



                                                                                               -28-                                                                                        7070
  

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