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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Hall v. Hall (9/14/2018) sp-7296

Hall v. Hall (9/14/2018) sp-7296

           Notice:   This opinion is subject to correction before publication in the P                     ACIFIC  REPORTER.  

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                       THE SUPREME COURT OF THE STATE OF ALASKA                                        

BERTHA  DELORES  HALL,                                           )  

                                                                 )          Supreme  Court  No.  S-16083  

                                 Appellant,                      )  


                                                                 )          Superior Court No. 3PA-14-01357 CI  

           v.                                                    )  


                                                                 )          O P I N I O N  


ADOLPH HALL,                                                     )  


                                                                 )          No. 7296 - September 14, 2018  

                                 Appellee.                       )  


_______________________________ )  


                      Appeal  from  the  Superior  Court  of  the  State  of  Alaska,  


                      Third Judicial District, Palmer, Eric Smith, Judge.  


                      Appearances:                Lynda   A.   Limón,   Limón   Law   Firm,  


                      Anchorage,  for  Appellant.                     David  A.  Golter,  Golter  Law  


                      Office, LLC, Palmer, for Appellee.  


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


                      and Carney, Justices.  


                      STOWERS, Chief Justice.  



                      A  couple divorced in 2015 and disputed whether  certain pieces  of real  


property in Louisiana and Mississippi were separate or marital. The superior court relied  


on provisions in a document titled a last will and testament for its finding that the parties  


intended that the Louisiana properties be the husband's separate property and that the  


Mississippi properties be the wife's separate property.  We conclude that the court erred  


in its transmutation analysis. The court also erred in not providing support for its finding  

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regarding the ownership of one of the Louisiana properties and in not addressing the                                                                                                                     

question of the purported conveyance of properties by the husband to his children before                                                                                                          

the parties' separation.                                 We reverse the superior court's property distribution decision                  

and remand for further proceedings.                      

II.             FACTS AND PROCEEDINGS               


                                Adolph and Bertha Hall                                                                                                                                 

                                                                                               married in June 1975, separated in November  


2014, and divorced in August 2015.   No children were born of the marriage.   Both  


Adolph and Bertha had been married previously and have children  from their first  



                                Before they married, Adolph owned 137 acres in Louisiana.  He defaulted  


on that property when he and his first wife divorced.  Adolph's father purchased the  


property to avoid foreclosure, with the understanding that Adolph would pay him back  



for it.  Adolph's father executed a counterletter                                                                     in March 1973, documenting that the  


property was purchased on behalf of Adolph.  At some point after the initial document  


was prepared, the following language was added to the counterletter:  "$40,000.00 paid  


to John Hall by Adolph Hall May 1975, Adolph Hall being Divorced = and being a  


Single man." Someone initialed the change with the date May 15, 1975; Adolph did not  


know who initialed it and testified that the initials were neither his nor his father's.  


Adolph testified that he finished repaying the $40,000 in May 1975, shortly before his  


marriage  to  Bertha  on  June  9,  1975,  but  the  superior  court  "did  not  find  credible  

                1               Bertha's name has been restored to Bertha Rouser Scott.                                                                    

                2               A counterletter is "[a] document in which the parties to a simulated contract                                                                                 

record their true intentions."                                       Counterletter, B                        LACK 'S  LAW  DICTIONARY  (10th ed. 2014)                                             


(citing La. Civ. Code Ann. art. 2025 (2016)).                                                                     "For example, the record owner of real  


property may acknowledge in a counterletter that another person actually owns the  


property."  Id.  

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Adolph's testimony that he was able to pay his father $40,000 in a little under two years"  


and pointed out that "the provenance of the annotation on the Counter Letter is unclear."  


Instead, "[t]he court found credible Bertha's testimony that the parties made payments  


on the 137 acres during the marriage."  The 137 acres were deeded to Adolph by his  


father in January 1983. The Louisiana Department of Transportation and Development  


later purchased a portion of that land, with both Adolph and Bertha signing the document  


of sale.   Adolph also sold timber from the 137 acres and sometimes placed the sale  


proceeds into joint marital accounts.   He conveyed the 137 acres to his children in  


January 2014, allegedly without Bertha's knowledge.  


                    Otherproperties discussed during AdolphandBertha'sdivorceproceedings  


include three smaller lots in Louisiana and some land in Mississippi. Adolph and Bertha  


dispute the ownership of one of the smaller Louisiana lots, lot 9, which was purchased  


during the marriage.  According to Adolph, his son owned half of lot 9, having made  


monthly payments on it. He testified that the other half was marital and that he "felt like  


[Bertha] had an interest in the property" and therefore offered to pay her "[h]alf of what  


the appraiser's office has got it assessed for" when he conveyed the entire lot to his son  


in January 2014.  According to Bertha, the payments from the son were not for the loan  


on lot 9 but rather for other loans between him and his father.  She testified that she and  


Adolph still owned lot 9 and that she was not aware of the conveyance to Adolph's son  


until her attorney received that information from Adolph.  As to the land in Mississippi,  


the superior court found that it was owned by Bertha prior to the marriage; according to  


Bertha's testimony, however, she received three acres as an inheritance, and she and  


Adolph later purchased additional property together in Mississippi.  


                    In September 2007 Adolph and Bertha executed a document entitled "Last  


Will & Testament of Adolph Hall."  The document was drafted without the aid of an  


attorney.  Bertha testified that Adolph drafted the document and that she disagreed with  

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"the way he had it programmed" but eventually signed after making a change to one of                                                                              

the paragraphs.                Despite her reluctance to sign the document and her testimony that she                                                          

had just had heart surgery, the superior court found "there was no evidence that she was                                                                       

compelled to sign the document or that she did not understand what she was signing."   


The document includes the following provision, signed by Adolph:  "I, Adolph Hall  


give up all rights to the Property in the State of Mississippi, which is in the name of  


Adolph & Bertha Hall." The following provision in the document was signed by Bertha:  


"I, Bertha Hall give up all rights to the property in the State of Louisiana, with the  


exception of the cattle & Certificate of Deposit (CD),  which  is also in the state of  



                          Adolph testified that the document "was done to confirm if anything did  


happen to [him], that the land in Louisiana would be conveyed to [his] children," and  


Bertha testified that it was for when Adolph died. Both Adolph and Bertha testified that  


the agreement between them was that the property in Louisiana would be Adolph's and  


would be given to Adolph's children and that the property in Mississippi would be  


Bertha's, but the context suggests Bertha meant that this would be the arrangement upon  


Adolph's death .  


                          In January 2014 Berthatalked with Adolph aboutgetting alegalseparation.  


Adolph testified that the conversation took place around Bertha's birthday, which he  


indicated is January 6 or 7.   On January 22 Adolph transferred the 137 acres to his  


children.  But he testified that the conversation about legal separation did not take place  


before he conveyed  the property.                                     In  March 2014 Bertha filed  for  divorce,  and  in  


November 2014 Adolph and Bertha separated.  

                          Trial was held in May 2015 and the superior court issued a written order  


in  August 2015.                    The  superior  court granted  the divorce and made determinations  


regarding property distribution.  The ownership of the 137 acres and lot 9 in Louisiana  

                                                                                -4-                                                                         7296

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was "substantially  disputed."                   Adolph  claimed  that the Louisiana property  was his  


separate property and Bertha claimed that it was marital.   The court noted Bertha's  


arguments that both Adolph and Bertha signed the document of sale for the portion of  


that property that was sold to the State of Louisiana and that proceeds from timber sales  


from the 137  acres were placed  into  joint marital accounts,  and  it "found  credible  


Bertha's testimony that theparties made payments on the 137 acres during the marriage."  


"These facts," the court found, "would support Bertha's claim that the 137 acres were  


transmuted into marital property." "But," the court explained, "there is more persuasive  


evidence that the parties did not intend to treat either the 137 acres or the Mississippi  


property  as  marital  property."                  The  court  cited  provisions  from  the  "Last  Will  &  


Testament  of  Adolph  Hall"  document,  concluding  that  they  were  "a  fully  credible  


indication of the parties' intent regarding the 137 acres and the Mississippi property" and  


"that even if both properties had been treated as marital property . . . , both parties clearly  


stated their intent that the properties henceforth were to be treated as their separate, non- 


marital property, to be given to their children."  The court therefore found that the 137  


acres were not marital property. The court also found that Adolph and his son owned lot  



                    Bertha appeals.  She challenges the superior court's reliance on the  "Last  


Will & Testament of Adolph Hall" document in determining that Adolph and Bertha  


intended for the 137 acres to be Adolph's separate property.  She also challenges the  


finding that lot 9 was non-marital property owned by Adolph and his son.  




                    This  appeal  concerns  the  first  step  for  property  division  in  divorce  


proceedings, "deciding what specific property is available for distribution," which often  

                                                                -5-                                                         7296

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requires characterizing property as separate or marital.                                "Underlying factual findings as                

to   the   parties'   intent,   actions,   and   contributions   to   the   marital   estate   are   factual  

                                                                    4  A finding of "inten[t] to transmute separate  

questions," which we review for clear error.                                                                                 

                                                                                                     5  The superior court's  

property into marital property is also reviewed for clear error."                                                             


legal rulings are reviewed de novo.6  



                     Under Alaska law a spouse's separate property may be transmuted into  


marital property if "that is the intent of the owner and there is an act or acts which  


demonstrate that intent."7   As we explained in Kessler v. Kessler, separate property can  


transmute into marital property through an implied interspousal gift "when one spouse  


intends  to  donate  separate  property  to  the  marital  estate  and  engages  in  conduct  


                                            8   We emphasized that the relevant intent is that of "the  

demonstrating that intent."                                                                                                       


owning spouse, not the married couple."9   And we explained that the inquiry was better  


framed "as an intent to 'donate' or 'convey' separate property to the marital unit or  


           3         Beals  v.  Beals,  303  P.3d  453,  458-59  (Alaska  2013).  

           4         Id.  at  459.  

           5         Hanson  v.  Hanson,   125  P.3d  299,  304  (Alaska  2005).  

           6         Turner  v.  Municipality  of  Anchorage,   171  P.3d   180,   185  (Alaska  2007).  

           7         Thomas  v.  Thomas,   171  P.3d  98,   107  (Alaska  2007)  (quoting  Chotiner  v.  

Chotiner,  829  P.2d  829,  832  (Alaska  1992));  see  also  Sparks  v.  Sparks,  233  P.3d  1091,  

1094  (Alaska  2010),  overruled  on  other  grounds  by  Engstrom  v.  Engstrom,  350  P.3d  

766,  771  (Alaska  2015).  

           8         411 P.3d 616, 618-19 (Alaska 2018).  


           9         Id. at 619 (emphasis in original).  


                                                                  -6-                                                            7296

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marital   estate,   rather   than   as   an  intent  to   'treat   .   .   .   separate   property   as   marital  

property.' "   10  

                       The superior court's transmutation analysis was misdirected.  The court's  


inquiry focused on whether the married couple intended to treat the property as marital  


property, rather than on whether the owning spouse intended to donate the property to  


the marital estate. The court found that marital funds were used to pay a mortgage on the  


 137 acres of Louisiana property titled in Adolph's name, that both Adolph and Bertha  


signed a document for the sale of a portion of that property, and that some income from  


that property  was used  by  the marital  estate.                                    However,  these facts are not key  to  


transmutation's donative intent analysis.  


                       The finding that marital funds were used for mortgage payments on the 137  


                                                                                                                               11   On remand  

acres suggests that some, if not all, of the 137 acres were marital property.                                                             


the superior court should identify whether the 137 acres were marital property in whole  


or in part because it was paid for with marital funds; the court should then consider  


whether Adolph had the necessary donative intent with respect to any separate portion  


of the property.   A similar analysis is needed regarding lot 9, which was purchased  


during the marriage.12  


            10         Id.  (first quoting          Sparks, 233 P.3d at 1094; then quoting                            Schmitz v. Schmitz             ,  

88 P.3d 1116, 1125 (Alaska 2004)) (footnote omitted).                            

            11         Id. at 622 & n.33 (noting that "in most equitable distribution states the use  


of marital funds to pay down the mortgage on separate property creates a marital interest  


in that property," without deciding whether to adopt that approach in Alaska (citing 1  


BRETT   R.   TURNER, E                 QUITABLE   DISTRIBUTION   OF   PROPERTY   §§   5:24,   5:26   (3d   ed.  


            12         The superior court's decision appears to include no analysis to support the  


finding that the lot 9 "property was owned by Adolph and his son."  


                                                                         -7-                                                                  7296

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                                                     The superior court's analysis regarding the "Last Will & Testament of                                                                                                                                                                    

Adolph   Hall"   document   was   also   unclear.     The   court   described   the   document   as  

providing "a fully credible indication of the parties' intent regarding the 137 acres and                                                                                                                                                                                                                                            

the Mississippi property" and found, based on that document, that Adolph and Bertha                                                                                                                                                                                                                                      

intended   the   137   acres   to   be   separate   property.     This   could   suggest   that   the   court  

considered the document in the context of its transmutation analysis, as evidence that the                                                                                                                                                                                                                                              

 137 acres were not transmuted into marital property.                                                                                                                                                                       But it appears that the court                                                                     

actually had moved on from its misdirected transmutation analysis without completing                                                                                                                                                                                                                   

it and instead found that the document controlled the property disposition and enforced                                                                                                                                                                                                                          

its terms.   

                                                    Although the document was titled as a will, it had a number of deficiencies                                                                                                                                                                      

if intended to be a will.                                                                      It could not be a valid joint will between Adolph and Bertha                                                                                                                                                              

because only                                             Adolph  is identified                                                               as the testator; the document provides                                                                                                                           only that   

Adolph, not Bertha, declares it as his will; only Adolph signed as testator; and the                                                                                                                                                                                                                                                   

witnesses identified only Adolph as the testator and stated that Adolph declared the                                                                                                                                                                                                                                                  

                                                                                             13          And no customary will provisions are included for Bertha.  

document was his will.                                                                                                                                                                                                                                                                                                                                  

Thus, the document was not Bertha's will.14  And while Adolph appears to have honored  


will execution formalities, it does not appear that he actually included any testamentary  


property dispositions in the document.15   It instead appears that he and Bertha attempted  


to create a present property agreement, so he would have separate property ultimately  


                           13                       See   AS   13.12.502(a)(3)   (requiring   for   witnessed   wills   two   witness  

 signatures of the testator's acknowledgments of or signature on will).                                                                                                                                                                                     

                           14                       See AS 13.06.050(62).  


                           15                       See AS 13.12.602 ("A will may provide for the passage of all property the  


testator owns at death and all property acquired by the estate after the testator's death.").  


                                                                                                                                                                     -8-                                                                                                                                                         7296

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passing to his children by intestate succession. Adolph testified at trial that the document                                                                                               

"was done to confirm if anything did happen to [him], that the land in Louisiana would                                                                                                             

be conveyed to [his] children."                                              The "will" contains no "gifts" to Adolph's children, so                                                                         

this would not happen as a gift under the will but rather by intestate succession as a result                                                                                                       

                                                                                                                                                                 16      Furthermore, the  

of the putative property agreement between Adolph and Bertha.                                                                                                                                              

superior court did not find that the document was a will and did not appear to treat it as  


a will; if the document were a valid will, the property disposition provision would likely  


have extinguished as a matter of law upon entry of the divorce.17  


                                 Instead, it appearsthatthesuperior court treated thedocument as something  


other than a will, potentially as a post-nuptial agreement in which the parties conveyed  


property interests to each other to place certain properties in sole and separateownership.  


The  court  expressed  its  very  clear  view  that  the  parties  had  agreed  to  a  property  


arrangement "henceforth" controlling in their relationship. However, the court made no  


finding  regarding  the  nature  of  the  document  and  whether  it  was  a  post-nuptial  


agreement.  If the document was a post-nuptial property division agreement, then its  


validity should be determined, taking into account the considerations in Burgess v.  


Burgess, which provides that "a transaction in which one spouse gains an advantage over  


the other is presumptively fraudulent."18  


                 16              See  AS13.12.101(a) ("Apart                                           ofadecedent's estatenoteffectivelydisposed                                             

of by will passes by intestate succession . . . .").                                                      

                 17              See AS 13.12.804(a)(1)(A) (providing for divorce revocation of revocable  


property  dispositions  between  former  spouses);  see  also  AS  13.12.802(a)  ("An  


individual who is divorced from the decedent . . . is not a surviving spouse . . . .").  


                 18              710 P.2d 417, 421 (Alaska 1985); see also AS 13.12.213(b);  Gabaig v.  


 Gabaig, 717 P.2d 835, 841 (Alaska 1986).  The presumption of fraud may be overcome  


if the spouse gaining the advantage shows "(a) payment of adequate consideration; (b)  



                                                                                                      -9-                                                                                             7296

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

                                                 Thus, we reverse and remand for the superior court to consider whether                                                                                                                                                                    

 some or all of the 137 acres and lot 9 were marital property, to conduct a transmutation                                                                                                                                                                          

 analysis consistent with our opinion in                                                                                                   Kessler, to make a determination as to the nature                                                                                                      

 and validity of the "Last Will & Testament of Adolph Hall" document, and to determine                                                                                                                                                                                               

 an equitable distribution of the marital estate.                                                                                                                        Furthermore, we note that because the                                                                                               

 court   found   that   the   properties   were   separate,   it   did   not   reach  the   question   of   the  

purported   conveyance   of   properties   by   Adolph   to   his   children  before   the   parties  

 separated.    This issue and other questions of fraudulent conveyance may need to be                                                                                                                                                                                                                

resolved on remand, and it is for the superior court to address any such questions in the                                                                                                                                                                                                                    

 first instance.   

V.                       CONCLUSION  

                                                 The superior court's property distribution decision is REVERSED and the                                                                                                                                                                                      

 case is REMANDED for further proceedings.  




 full disclosure to the other spouse of his or her rights and the value of the property; and  


 (c) that the spouse conferring the benefits has competent and independent advice."  


Burgess, 710 P.2d at 421.  

                                                                                                                                                     -10-                                                                                                                                              7296

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