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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Sharon Thompson v Everett Thompson (11/29/2019) sp-7421

Sharon Thompson v Everett Thompson (11/29/2019) sp-7421

           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,  


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                       THE SUPREME COURT OF THE STATE OF ALASKA                                       

SHARON  THOMPSON,                                                     )  

                                                                      )     Supreme  Court  No.  S-17262  

                                 Appellant,                           )  


                                                                      )     Superior Court No. 3NA-17-00007 CI  

           v.                                                         )  


                                                                      )     O P I N I O N  


EVERETT THOMPSON,                                                     )  


                                                                      )     No. 7421 - November 29, 2019  

                                 Appellee.                            )  



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


                      Judicial District, Naknek, Christina Reigh, Judge.  


                      Appearances:   Jacob A. Sonneborn, Law Office of Jacob  


                      Sonneborn, Anchorage, and A. William Saupe, Ashburn &  


                      Mason,  Anchorage,  for  Appellant.                               Kara  A.  Nyquist,  


                      Anchorage,  for Appellee.  


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


                      and Carney, Justices.  


                      CARNEY, Justice.  



                      A     divorced          wife      challenges           the     superior         court's        child      custody  


determination, marital property division, and child support order. Because we conclude  


that the court neither clearly erred nor abused its discretion when it awarded joint legal  


and shared physical custody, we affirm the custody determination.  But we vacate and  


remand the child support order because it does not include sufficient findings to support  

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

the calculation of the parents' income. And we vacate and remand the property division                                                                                                                                                       

because the court improperly separated a fishing vessel fromthe rest of the marital estate.                                                                                                                                                                              

Finally, we vacate and remand the attorney's fees award for consideration in light of the                                                                                                                                                                   

court's recalculation of the marital estate and the parties' incomes.                                                                                                         

II.                 FACTS AND PROCEEDINGS                        

                    A.                  Facts  

                                         Sharon and Everett Thompson married in 2011.                                                                                                           They have two minor                                

children, a son born in 2011 and a daughter born in 2015.                                                                                                                       

                                        Everett is a commercial fisherman living in Naknek.                                                                                                           He owns two fishing                        

vessels, one of which he purchased and fully paid off before he and Sharon married; the                                                                                                                                                                      

second vessel, the F/V N                                                    ORTHERN  FLYER, was purchased during the marriage.                                                                                                                 

                                        Everett and Sharon began dating in 2010; soon afterward Sharon moved                                                                                                                                     

into Everett's home, which he had purchased in 2001, and which is situated on a Native                                                                                                                                                          


allotment that cannot be transferred to a non-Native buyer.                                                                                                                                                                                                    

                                                                                                                                                                                           Although she worked in  


various jobs before they married, Sharon stayed home with the children during much of  


the parties' marriage. In financial documents filed in superior court Sharon indicated her  


primary occupation was film production.  

                    B.                  Proceedings  

                                        In April 2017 Sharon filed for divorce, seeking primary physical and sole  


legal custody of their children.  Everett answered the following month, asserting that he  


should have sole legal and primary physical custody as well as interim possession of the  


marital home.  Sharon and Everett negotiated an interim custody agreement, which the  


                    1                   See  former Alaska Native Allotment Act, 43 U.S.C.  270-1 to 270-3  


(repealed 1971); see also  43 U.S.C.  1634(a)(1) (2012) (providing for approval of  


allotment applications still pending upon repeal of Alaska Native Allotment Act and  


passage of Alaska Native Claims Settlement Act, 43 U.S.C.  1601-1629h (2012)).  


                                                                                                                               -2-                                                                                                                     7421

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

court approved in December 2017. Their agreement provided for joint legal custody and                                                                                                                         

established a schedule for alternating physical custody every two days.                                                                                                           

                                 1.               Hearings relevant to custody determination                                    

                                                  a.              January 2018   

                                 In mid-January 2018 Sharon petitioned for ex parte domestic violence                                                                                            


protective orders against Everett on behalf of herself and the children.                                                                                                                                     

                                                                                                                                                                               She alleged that  


she  had  reason  to  believe  their  daughter  may  have  been  sexually  abused  while  in  


Everett's custody, though she did not allege that Everett had committed sexual abuse;  


Sharon also alleged Everett had verbally and emotionally abused her. The court granted  


Sharon a short-term protective order against Everett and granted her temporary custody  


of the children.  But the court did not issue protective orders on behalf of the children,  


as it found Sharon had not established probable cause that Everett had committed a crime  



of domestic violence against them. 

                                 Everett moved to modify the temporary custody order, under which his  


visits with the children had to be supervised.   He sought to return to the alternating  


custody schedule in the parties' interim custody agreement.  


                                 A hearing was held over January 24 and 25 on Everett's modification  


motion.  Sharon and Everett agreed that the children had been in Everett's custody until  


he had dropped them off at daycare on the morning of January 8, after which Sharon's  


two days of custodial time started.   Sharon testified that later on January 8 she had  


observed that their daughter had unusual vaginal discharge and "a bright red . . . nick"  


                 2               See  AS 18.66.110 (governing ex parte and emergency protective orders).                                                                                                                 

                 3               See AS 18.66.110(a) (providing court shall issue ex parte protective order  


if it finds that petition "establishes probable cause that a crime involving domestic                                                                                                          

violence has occurred" and order is "necessary to protect the petitioner from domestic  



                                                                                                        -3-                                                                                               7421

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

on her genital area.                      Sharon had taken her to a health clinic in Naknek the following day                                                                     

for an examination, which revealed a three-millimeter laceration near the girl's vaginal                                                                                  

opening. Sharon also testified that shortly afterward she took the child to Dillingham for                                                                                          

a more thorough examination at a Child Advocacy Center (CAC), including swabs for                                                                                                  

                                                                                         4  Everett testified that he had supervised the  

DNA and sexually transmitted infections.                                                                                                                                           

children  during  his  custodial  time  and  that  "nothing  happened  in  [his]  care";  he  


suggested that the girl's symptoms could have been caused by a yeast infection or by her  


accidentally scratching herself.  The court restored Everett's  unsupervised visits with  


the children, but allowed Sharon to retain temporary custody for the duration of the  


short-term protective order.  


                             The court held a hearing on Sharon's request for long-term protective  


orders on January 30, 2018.  Sharon reiterated what she had observed on her daughter  


on January 8 and 9; Everett expressed skepticism that the symptoms were the result of  


sexual abuse. The court denied long-term protective orders for Sharon and the children,  


finding that Sharon had not established by a preponderance of the evidence that Everett  


had committed an act of domestic violence against any of them.  


                                           b.            June 2018  


                             In late May 2018 Sharon moved to modify interim custody, alleging that  


their daughter again appeared to have been sexually abused while in Everett's custody.  


Sharon also revivedher previous sexual abuse allegation based on the DNA result, which  


showed male DNA was present on the child but insufficient for analysis. Sharon accused  


Everett of failing to respond to the abuse allegations appropriately and of "minimiz[ing]  


them and repeatedly suggest[ing] that Sharon is the perpetrator."  Everett opposed her  




                             The DNA results had not yet come back at the time of the protective order  


modification hearing.  

                                                                                          -4-                                                                                         7421  

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


motion, asserting that Sharon was attempting to interfere with his custodial time by  


alleging abuse; he emphasized that no Office of Children's Services (OCS) case or  


criminal charges had been filed and that he had voluntarily submitted a sample of his  


own DNA when asked to do so by law enforcement.  


                    The court held a hearing in early June on the modification motion.  The  


nurse practitioner who had examined the girl at the Naknek clinic in January testified that  

she had observed an injury "consistent with penetration" and that Everett, who visited  


the clinic shortly after the exam, had seemed more concerned about what Sharon had told  


clinic staff than about the injury.  The nurse practitioner also testified that she did not  


know when the injury had occurred, but noted that "in children, injuries to the genitalia  


usually heal within 72 hours."  Everett testified that he "would take it very seriously" if  


he  believed  his  child  had  in  fact  been  abused  but  that  he  had  "no  indication  that  


something may have been wrong with [her]" and had never seen signs of her being  


sexually abused while in his care.  He stated that he "still d[id] not believe that she was  


sexually assaulted."  He suggested that the laceration may have come from the child's  


own fingernail and that the male DNA may have been transferred from her brother or  


from someone with whom she had contact while in Sharon's custody.  


                    A few days later the court issued an order modifying interim custody. The  


court maintained the two-day alternating schedule for their son, but required that their  


daughter spend nights with Sharon and only be with Everett from 9:00 a.m. to 7:30 p.m.  


on his custodial days. The court also prohibited Everett from leaving the children in any  


third party's care, aside from their daycare, during his custodial time.  


                    2.        Divorce proceedings  


                    A five-day divorce and custody trial was held in early August 2018. In late  


August the court issued its decree of divorce, child support order, and findings of fact  


and conclusions of law.  

                                                               -5-                                                         7421

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                                                                     a.                     Custody determination   

                                              The court awarded Sharon and Everett joint legal and shared physical                                                                                                                                                           

custody of both children.                                                                It modified the custody schedule from alternating every two                                                                                                                                         

days to alternating every three or four days.                                                                                                            The court found that the timing and cause                                                                                     

of their daughter's injury had not been "conclusively establish[ed]" and that Everett had                                                                                                                                                                                                     

credibly testified at trial that he appreciated the seriousness of sexual abuse allegations                                                                                                                                                                          

and could respond appropriately.                                                                                        The court therefore found that both parents were                                                                                                                 

equally capable of meeting the children's needs.                                                                                                                         

                                                                     b.                     Child support   

                                              Having determined that the parents would share custody, the court next                                                                                                                                                                       

considered child support. The court based its determination of Everett's income for child                                                                                                                                                                                                 

support   purposes   on   his   2016   tax   return,   which   it   found   provided   "a   reasonable  

representation" of his fluctuating fishing income. Based on his tax return the court found                                                                                                                                                                                             


that Everett's adjusted annual income for child support purposes was $61,185.                                                                                                                                                                                                             The  


court  reached  this  figure  by  applying  the  formula  set  forth  in  Alaska  Civil  Rule  


90.3(a)(1):  it subtracted the deductions listed on Everett's federal income taxes, added  


income fromPermanent Fund and Native corporation dividends he received, and applied  



"allowable  deductions."                                                                        The  court  found  that  Sharon's  income  from  "her  small  


business, contract work[,] and a variety of part-time jobs" generally fluctuated between  


 $15,000 and $25,000 and determined that her adjusted annual income for child support  


purposes  was  $19,808  based  on  "her  work  history,  .  .  .  degrees[,]  and  current  


employment status."  The court ordered Everett to pay $698 per month in child support.  

                       5                      See   Alaska   R.   Civ.   P.   90.3   (governing   child  support   awards).     Rule  

90.3(a)(1)   defines "adjusted                                                                        annual income" as "the parent's total income from all                                                                                                                                      

sources minus" certain listed deductions.                                                             

                       6                      See Alaska R. Civ. P. 90.3(a)(1).  


                                                                                                                                                 -6-                                                                                                                                      7421

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

It later amended this amount to $807 per month based on minor alterations to the custody  


schedule after reconsideration.  


                                                            c.                  Property division  


                                        The court then turned to dividing the marital estate.  It found that although  


 Sharon's college degree and skills made her employable, Everett's earning capacity was  


greater than hers due to his long-established fishing business.  The court also noted that  


Everett, as an Alaska Native, had healthcare coverage through Indian Health Services,  


while Sharon did not.  


                                        The court found the house where the family had  lived to be Everett's  


separate  property,  though  it  awarded  Sharon  $5,000  for  her  contributions  to  its  


renovation.  The court also found that both of Everett's fishing permits and one of his  


boats  -  which  he  had  "purchased,  paid  off[,]  and  overhauled  .  .  .  prior  to  the  


marriage" - were his separate property. The court determined that the second boat, the  


F/V N 

                   ORTHERN  FLYER, was marital property because it had been purchased during the                                                                                                                                                          

marriage.   However, because "Everett's extensive pre-marital experience in the fishery                                                                                                                                                        

provided him with the opportunity and resources to purchase" the boat, and because he                                                                                                                                                                        

had contributed disproportionately to the "purchase, maintenance[,] and operation of the                                                                                                                                                                   

vessel," the court awarded 70% of the equity in the F/VN                                                                                                                ORTHERN  FLYER  to Everett and                                                   

30% to Sharon.                                   

                                        For the rest of the marital estate, the court found that balancing the equities                                                                                                                      

warranted awarding 55% to Sharon and 45% to Everett. Based on the property that each                                                                                                                                                                  

party retained, the 55/45 division resulted in Everett owing Sharon an equalization                                                                                                                                           

payment of $84,537.60.                                                    The court ordered Everett to make the equalization payment                                                                                                     

within four years of the date of its order, with interest accruing at 5% annually.                                                                                                                                                             

                                                            d.                  Attorney's fees   

                                        Sharon had filed a motion for interim attorney's fees, arguing that her                                                                                                                                          

                                                                                                                              -7-                                                                                                                    7421

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

 financial circumstances left her unable to litigate "on an equal footing" with Everett. She                                                                                                                                                                                                                             

 later argued that she was entitled to an award of enhanced attorney's fees because of                                                                                                                                                                                                                                        

Everett's "vexatious conduct."                                                                                        The court denied the request for enhanced fees, finding                                                                                                                               

that Everett and his counsel's conduct throughout the case did not "[rise] to the level . . .                                                                                                                                                                                                                                    

that demands enhanced fees."                                                                                        

                                                   The court also found that its 55/45 division of the bulk of the marital estate                                                                                                                                                                                 

 "place[d] the parties on equal ground to afford the litigation in this case" and declined                                                                

to issue a fee award separate from the property division.                                                                                                                                                              

                                                   Sharon appeals, challenging the custody determination, the child support  

 award, the property division, and the lack of an attorney's fees award.                                                                                                                                                                                                   

III.                      STANDARD OF REVIEW                                                    

                                                   We have recognized superior courts' "broad discretion in child custody                                                                                                                                                                                

 decisions, and we will reverse only if findings of fact are clearly erroneous or if the                                                                                                                                                                                                                                  

                                                                                                                                            7  Clear error exists "when a review of the record  

 superior court abused its discretion."                                                                                                                                                                                                                                                                       

 leaves  [us]  with  a  definite  and  firm conviction  that  the  superior  court  has  made  a  


mistake."8  "An abuse of discretion exists where the superior court 'considered improper  


 factors in making its custody determination, failed to consider statutorily mandated  


 factors,  or  assigned  disproportionate  weight  to  particular  factors  while  ignoring  


 others,'  "9                               or  where  "the  superior  court's  decision  denied  a  substantial  right  to  or  


                          7                        Geldermann v.   Geldermann,  428  P.3d  477,  481  (Alaska  2018)  (quoting  

Riggs  v.  Coonradt,  335  P.3d   1103,   1106  (Alaska  2014)).   

                          8                       Id.  (alteration  in  original)  (quoting  Riggs,  335  P.3d  at   1106).  

                          9                       Id. (quoting Riggs, 335 P.3d at 1106).  


                                                                                                                                                               -8-                                                                                                                                                   7421

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

substantially prejudiced a party."                     10  



                      "Child support awards are reviewed for abuse of discretion."                                            However,  


we  review  the  underlying  factual  findings,  "including  findings  regarding  a  party's  

                                        12   And "[w]hether the superior court applied the correct legal  



income," for clear error. 

standard to its child support determination is a question of law" reviewed de novo.13  


"Whether there are sufficient findings for informed appellate review is a question of  



                      Division of marital property  involves three  steps:                                    "(1)  deciding  what  


specific property is available for distribution, (2) finding the value of the property, and  


(3) dividing the property equitably."15                            "[C]haracterization of property as separate or  


marital may involve both legal and factual questions."16                                     We review underlying factual  


findings, including findings as to the parties' "contributions to the marital estate" and  


           10         Id.  (quoting  Ronny M. v. Nanette H.                       , 303 P.3d 392, 400 (Alaska 2013)).             

           11         Ruppe v. Ruppe            , 358 P.3d 1284, 1289 (Alaska 2015) (quoting                                Heustess v.   

Kelley-Heustess, 259 P.3d 462, 467 (Alaska 2011)).  


           12         Shanigan  v.  Shanigan,  386  P.3d  1238,  1240  (Alaska  2017)  (quoting  


 Wilhour v. Wilhour, 308 P.3d 884, 887 (Alaska 2013)).  


           13         Geldermann, 428 P.3d at 482 (alteration in original) (quoting Limeres v.  


Limeres, 320 P.3d 291, 295 (Alaska 2014)).  


           14         Horne v. Touhakis, 356 P.3d 280, 282 (Alaska 2015) (quoting Hooper v.  


Hooper, 188 P.3d 681, 685 (Alaska 2008)).  


           15         Engstrom v. Engstrom, 350 P.3d 766, 769 (Alaska 2015) (quoting Beals v.  


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


           16         Id. (quoting Beals, 303 P.3d at 458-59).  


                                                                     -9-                                                              7421

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

"inten[t] to transmute separate property into marital property," for clear error.17  Legal  

conclusions are reviewed de novo.18 

                                                            "[V]aluation of assets 'is a factual determination   

                                                   19  "We review the trial court's third step, the equitable  

that we review for clear error.' "                                                                                         

allocation of property, for an abuse of discretion" and "will reverse only if the division  



[was] clearly unjust." 


                     Trial courts have "broad discretion" over attorney's fees awards in divorce  


actions, and we will reverse an award of attorney's fees only if it is "arbitrary, capricious,  


manifestly unreasonable, or stems from an improper motive."21  




           A.	 	     The  Superior  Court  Did  Not  Err  By  Awarding  Joint  Legal  And  


                     Shared Physical Custody.  


                     The superior court is entitled to broad discretion in making a child custody  


determination, provided it considers the appropriate statutory and other factors and does  



not consider inappropriate ones.                       Alaska Statute 25.24.150 sets forth a non-exclusive  


list of factors the court must take into account:  


                     (1)  the  physical,  emotional,  mental,  religious,  and  social  

           17        Hall  v.  Hall,  426  P.3d   1006,   1009  (Alaska  2018) (alteration  in  original)  

(first  quoting  Beals,  303  P.3d  at  459;  then  quoting  Hanson  v.  Hanson,  125  P.3d  299,  304  

(Alaska  2005)).  

           18        Engstrom, 350 P.3d at 769.  


           19        Id. (quoting Beals, 303 P.3d at 459).  


           20        Id. (alteration in original) (first quoting Beals, 303 P.3d at 459; then quoting  


Ethelbah v. Walker, 225 P.3d 1082, 1086 (Alaska 2009)).  


           21        Ruppe v. Ruppe, 358 P.3d  1284, 1289 (Alaska 2015) (quoting Stevens v.  


Stevens, 265 P.3d 279, 284 (Alaska 2011)).  


           22        See Geldermann v. Geldermann, 428 P.3d 477, 481 (Alaska 2018).  


                                                                 -10-	                                                           7421

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

                          needs of the child;       

                          (2)  the capacity and desire of each parent to meet these needs;                                          

                          (3)  the child's preference if the child is of sufficient age and                                              

                          capacity to form a preference;          

                          (4)  the love and affection existing between the child and each                                               



                          (5)  the  length  of  time  the  child  has  lived  in  a  stable,  


                          satisfactory environment and the desirability of maintaining  



                          (6) the willingness and ability of each parent to facilitate and  


                          encourage a close and continuing relationship between the  


                          other parent and the child, except . . . [where] one parent  


                          shows that the other parent has sexually assaulted or engaged  


                          in domestic violence against the parent or a child, and that a  


                          continuing relationship with the other parent will endanger  


                          the health or safety of either the parent or the child;  


                          (7) any evidence of domestic violence, child abuse, or child  



                          neglect in the proposed custodial household or a history of  


                          violence between the parents;  


                          (8) evidence that substance abuse by either parent or other  


                          members of the household directly affects the emotional or  


                          physical well-being of the child;  



                          (9) other factors that the court considers pertinent. 

The court "need not mention each factor by name"; best interests findings are sufficient  


so long as they provide "a clear indication of the factors [that the court] considered  


important in exercising its discretion" or enable this court on review to ascertain what  

considerations were involved from the record.24  


             23           AS 25.24.150(c).   



                          Mengisteab v. Oates, 425 P.3d 80, 87 (Alaska 2018) (alteration in original) 


                                                                                 -11-                                                                           7421

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

                      Sharon argues the court erred as to the second statutory factor: the parents'                               


respective capacity to meet the children's needs.                                                           

                                                                                     She contends that the court applied  


an incorrect standard of proof by requiring " 'conclusive' proof of the abuser's identity"  


rather than evaluating each parent's capacity to ensure the children's safety under a  

                                                                   26  (Emphasis in original.)  She asserts that by  

preponderance of the evidence standard.                                                                                             

applying this allegedly heightened standard of proof, the court erroneously concluded  


that any sexual abuse, if it occurred, may not have occurred during Everett's custodial  


time or as a result of his failure to protect his daughter.  She argues that evidence at trial  


established that it was "a virtual certainty" that the child was sexually abused while in  


Everett's  custody.               She  contends  that  the  court  also  clearly  erred  when  it  credited  


Everett's testimony at trial that he would be able to respond appropriately to sexual abuse  


allegations in the future.  She argues that it was thus clear error to find both parents  


equally able to provide for the children's physical, emotional, mental, religious, and  


social needs.  


                      Everett does not directly address Sharon's argument about the standard of  


proof for the sexual abuse allegations, but he suggests the evidence could not have  


established the timing and causes of their daughter's injury even under a preponderance  


standard:  he argues that Sharon presented "[n]o evidence . . . that could substantiate  


when the injury to [the girl] occurred, whether it occurred solely during [Everett's  


custodial] time, or who was the perpetrator." He asserts that his initial apparent disregard  


for  the  possibility  of  sexual  abuse  was  because  he  was  given  only  "inconclusive  


           24         (...continued)  


(quoting Caroline J. v. Theodore J., 354 P.3d 1085, 1092 (Alaska 2015)).  



                      AS 25.24.150(c)(2).  

           26         See id.  


                                                                    -12-                                                              7421

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

information" about her injury, and that he became "convinced that [the girl] had been                                                                                                           

injured" as soon as he read the CAC report, which he claims he received one day before                                                                                                      

trial.   And he argues that in the absence of testimony from "anyone at CAC or OCS, or                                                                                                                

any investigators" about the girl's injury, the court was correct to determine that there         

was no evidence to establish the timing of the injury or prove that it occurred because of                                                                                                            

Everett's failure to properly supervise his daughter.                                                                      

                               In   general,   each   parent   in  a   custody   proceeding   must   establish   by   a  

preponderance of the evidence that the parent's proposed custody plan would serve the                                                                                                               

children's best interests, including that his or her plan can adequately provide for the                                                                                                           

                                           27       In  its  findings  on  this  factor,  the  superior  court  stated:                                                                        "The  

children's     needs.                                                                                                                                                                         

evidence does not conclusively establish when, how[,] or where [the girl] was injured,  


so the court cannot assume it happened as a result of Everett's failure to protect [her]."  


This may suggest, as Sharon argues, that the court was looking for "conclusive" proof  


of the source and timing of the girl's injuries rather than applying a preponderance  




                               But evidence in the record leaves open the possibility that the girl's injuries  


could have occurred during either parent's custodial time.  The nurse practitioner who  


examined the girl on January 9 stated that injuries to the genital area in children usually  


heal within 72 hours. Both parents had custody of the children during the 72 hours prior  


to the examination.  And both parents testified at the domestic violence protective order  


hearings that they had supervised their daughter and that nothing had happened to her  


                27             See  Snider  v.  Snider,  357  P.3d  1180,  1189  &  n.34  (Alaska  2015)  


("[N]either parent has 'a greater burden than the other in attempting to obtain custody  


in a dissolution proceeding.' " (quoting Johnson v. Johnson, 564 P.2d 71, 75 (Alaska  


 1977))).  An exception applies if the court finds that one parent has committed acts of  


domestic violence that would give rise to a rebuttable presumption against custody, see  


AS 25.24.150(g), but the court here explicitly found that neither parent had done so.  

                                                                                                 -13-                                                                                          7421

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

while she was in their care.                                                                     Given the competing testimony, and absent any clearer                                                                                                                     

evidence of the timing of the girl's injury, it was not error to conclude that Sharon had                                                                                                                                                                                              

not established by a preponderance of the evidence that it occurred during Everett's                                                                                                                                                                                

custodial time.   

                                             Furthermore, the court's ultimate finding that both parents could provide                                         

equally well for the children's needs rested on its determination that "Everett credibly   

testified [at trial] that he now understands the seriousness of [sexual abuse] allegations                                                                                                                                                                     

and knows how to respond when his children may be the subject of abuse."                                                                                                                                                                                         Although  

Everett's trial testimony on this point reflected a change from his testimony in previous                                                                                                                                                                             

hearings, the court appeared to credit Everett's testimony that he had initially received                                                                                                                                                                             

incomplete information about the possible abuse and had only been provided the full                                                                                                                                                                                                    

medical records shortly before trial.                                                                                     

                                             This   finding  is   not   clearly   erroneous,   especially   given   the   substantial  


deference we accord factual findings that "are based primarily on oral testimony."                                                                                                                                                                                                                    

Other than the reference to "conclusive" evidence on the specific question of the source  


of  the  girl's  injury,  there  is  no  indication  the  court  applied  anything  besides  a  


preponderance standard when it evaluated the facts presented.   It also weighed the  


parents' competing trial testimony, and it determined that Everett would be as able to  


protect his daughter's safety as Sharon.  


                                             Trial  courts,  not  appellate  courts,  bear  the  primary  responsibility  for  


"judging the credibility of witnesses and weighing conflicting evidence."29                                                                                                                                                                                                That is  


exactly  what  the  court  did  here:  it  weighed  conflicting  evidence  about  Everett's  


                       28                    Berry v. Berry                                 , 277 P.3d 771, 778 (Alaska 2012) (quoting                                                                                                      Ebertz v. Ebertz                                     ,  

 113 P.3d 643, 646 (Alaska 2005)).                                                                                     

                       29                    Id. (quoting Ebertz, 113 P.3d at 646).  


                                                                                                                                           -14-                                                                                                                                    7421

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

understanding of the sexual abuse allegations, made a credibility determination, and                                                                                                                                                                                                                                                                                                                                                                                        

 awarded custody based on that determination.                                                                                                                                                                                                                    We therefore affirm the superior court's                                                                                                                                                  

 award of joint legal and shared physical custody.                                                                                                                                                                               

                                      B.	 	                                There   Are   Insufficient   Findings   To   Support   The   Calculation   Of   

                                                                           Incomes And Child Support Award.                                                                                                                                          

                                                                           Sharon argues that the superior court clearly erred in its calculation of                                                                                                                                                                                                                                                                                                                                 

Everett's income for child support purposes.                                                                                                                                                                                                            She challenges the court's use of his 2016                                                                                                                                                                    

tax return rather than more recent income information; its failure to include over $8,000                                                                                                                                                                                                                                                                                                                                                                   

 she claims he received in payments for boat storage, fishing nets, and artwork sales; and                                                                                                                                                                                                                                                                                                                                                                                    

its subtraction of "allowable deductions" from Everett's income without an explanation                                                                                                                                                                                                                                                                                                                                           

 of what they were. She also argues the court erred by overestimating her income and by                                                                                                                                                                                                                                                                                                                                                                                             

using information from different time periods - 2016 for Everett and 2015 to 2017 for                                                                                                                                                                                                                                                                                                                                                                                            

 Sharon - to calculate income for each parent.                                                                                                                                                                                                                        

                                                                           Everett responds that the superior court was within its discretion to select                                                                                                                                                                                                                                                                                                           

his 2016 tax return as a basis for calculating his income; that his income from artwork                                                                                                                                                                                      

 sales, boat storage, and fishing nets was properly excluded because it was derived from                                                                                                                                                                                                                                                                                                                                                                               

 one-time or infrequent events; and that the court's calculation of Sharon's income was                                                                                                                                                                                                                                                                                                                                                                                    

 supported by the evidence at trial.                                                                                                                                                            

                                                                           Civil Rule 90.3(a)(1) defines "adjusted annual income" for child support                                                                                                                                                                                                                                                 

purposes as the parent's "total                                                                                                                                                        income from all sources" minus certain deductions,                                                                                                                                                                                      

including mandatory deductions like taxes and union dues, voluntary contributions to a                                                                                                                                                                                                                                                                                                                                                                                                      

retirement account, child or spousal support from other relationships, work-related child                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                         30                     The  commentary  explains  that  

 care   expenses,  and  health   insurance   premiums.                                                                                                                                                                                                                                                                                                                                                                                                                   

 "[i]ncome from self-employment . . . includes the gross receipts minus the ordinary and  


                                     30                                    Alaska R. Civ. P. 90.3(a)(1).  


                                                                                                                                                                                                                                       -15-                                                                                                                                                                                                                             7421  

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


necessary expenses required to produce the income."                                      The superior court may exercise         


"broad   discretion   in   determining   what   to   include   in   its   income   calculation."                                       An  


ongoing child support award "should be based on the income the parent is expected to  



receive" for the applicable period under the award. 

                      1.	 	     Although it was not error to rely on Everett's 2016 tax return to  


                                calculate  his  income,  the  superior  court  made  inadequate  


                                findings to support the deductions allowed.  


                      The commentary to Civil Rule 90.3 specifies that child support should be  


"calculated as a certain percentage of the income which will be earned when the support  


is to be paid."34  


                          This determination is "necessarily . . . somewhat speculative" and "may  



be especially difficult when the obligor has had very erratic income in the past."                                                   The  


                                                                                                                                  and it  

superior court has discretion to identify "the best indicator of future earnings," 



may but is not required to, "average the obligor's past income over several years." 

           31         Alaska  R.  Civ.  P.  90.3  cmt.  III.B.    

           32        Holmes  v.  Holmes,  414  P.3d  662,  667  (Alaska  2018).  

           33         Swaney  v.  Granger,  297  P.3d   132,   139  (Alaska  2013).  

           34         Alaska  R.  Civ.  P.  90.3  cmt.  III.E.  

           35        Id.   

           36        Morris  v.  Horn,  219  P.3d   198,  206  (Alaska  2009).   

           37        Id.;  cf  Zimin  v.  Zimin,  837  P.2d  118,  123  (Alaska  1992)  (upholding  income  

determination   that   rejected   obligor's   proposed   ten-year  average   and   instead   based  

support  award  on  his  one-year  projected  earnings);  and  Keturi  v.  Keturi, 84  P.3d  408,  

413  (Alaska  2004)  (upholding  income  determination  based  on  four-year  average).  

                                                                   -16-	                                                            7421

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

                                                   First, the superior court explained its reliance on Everett's 2016 tax return:                                                                                                                                                                              

                                                                            Everett believably testified that he delivered 150,000  

                                                  pounds of fish in 2016. According to the 2016 tax return, the                                                                                                                                                           

                                                   gross revenue for those fish was $259,490.                                                                                                                          Everett testified   

                                                   that the catch in 2017 was slightly lower (140,000 pounds)                                                                                                                                         

                                                   and in 2018 was significantly higher (230,000 pounds).                                                                                                                                                             His  

                                                   gross revenue from fishing in 2015 was $175,110. Income in                                                                                                                                                                 

                                                   the fishing industry will be affected by a variety of factors                                                                                                                                           

                                                   and   is   not   consistent   each   year.     Everett   may   have   other  

                                                   sources of income each year - such as income from his                                                                                                                                                                 

                                                   artwork, boat storage and selling fishing gear - but that                                                                                                                                                         

                                                   income will also fluctuate each year. Because of the ongoing                                                                                                                                       

                                                  potential   shift   in   income,   the   court  finds   the   income   and  

                                                   information  from    the    2016    tax    return    is    a    reasonable  

                                                   representation of Everett's . . . self-employment income.                                                                                                                                                              

(Footnotes   omitted.)     Nothing   in   Rule   90.3  precludes   the   court   from   selecting   a  

benchmark year to determine annual income, and given that Everett's catch size and                                                                                                                                                                                                                                       

gross revenue in his 2016 tax return did not appear abnormally high or low compared to                                                                                                                                                                                                                                          

other years, it was reasonable for the court to base its expected income determination on                                                                                                                                                                                                                                     

the 2016 tax return.                             

                                                   Second, because income calculations for a future period must be based on                                                                                                                                                                                                   

                                                                                                                  38  it was not error for the court to exclude infrequent or  

the parent's expected income,                                                                                                                                                                                                                                                                                                  

one-time sources of income, such as the sale of artwork and fishing nets.   Everett  


testified that his income from artwork sales varies from year to year and that he sells  


fishing  gear  and  rents  out  boat  storage  space  infrequently.                                                                                                                                                                                   We  "give  'particular  


deference' to the trial court's factual findings when they are based primarily on oral  


testimony, because the trial court, not this court, performs the function of judging the  




                                                   Swaney v. Granger, 297 P.3d 132, 139 (Alaska 2013).  

                                                                                                                                                            -17-                                                                                                                                                     7421  

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


credibility   of   witnesses."                                                                         We   therefore   find   no   error   in   the   court's   treatment   of  

Everett's artwork and gear sales.                                                                                        

                                                 However, the superior court's decision does not contain sufficient findings                                                                                                                                                                 

to support its calculation of deductions allowed from Everett's income.                                                                                                                                                                                                            The court   

determined Everett's total income to be $80,817, and then found that his adjusted annual                                                                                                                                                                                                           

income "[a]fter allowable deductions" was $61,185.                                                                                                                                                     But as Sharon points out, the                                                                          

court's findings and conclusions contain no explanation of how it arrived at a total figure                                                                                                                                                                                                          

of nearly $20,000 for "allowable deductions."                                                                                                                              

                                                 Rule 90.3(a)(1) lists certain mandatory deductions that must be subtracted                                                                                                                                                          

from a parent's total income to determine that parent's adjusted annual income; these                                                                                                                                                                                                                  

include, for instance, taxes, union dues, mandatory and voluntary retirement or pension                                                                                                                                                                                                       

plan contributions, court-ordered child and spousal support from other relationships,                                                                                                                                                                                    

                                                                                                                                                                                                                                        40  But without findings  

work-related childcare expenses, and health insurance premiums.                                                                                                                                                                                                                              

that indicate which of these items were included in the deductions from Everett's total  


income, we have no basis on which to assess whether the court's ultimate determination  


of his income was clearly erroneous.41  We therefore remand for the court to make the  


necessary findings with regard to Everett's income.  


                        39                      Berry v. Berry                                      , 277 P.3d 771, 778 (Alaska 2012) (quoting                                                                                                                 Ebertz v. Ebertz                                          ,  

 113 P.3d 643, 646 (Alaska 2005)).                                                                  

                        40                       Alaska R. Civ. P. 90.3(a)(1)(A)-(F).  


                        41                       See, e.g., Horne v. Touhakis, 356 P.3d 280, 284 (Alaska 2015) (remanding  


where  "lack  of  specific  findings"  precluded  appellate  review  of  imputed  income  


determination in child support modification order); Olmstead v. Ziegler, 42 P.3d 1102,  


 1107 (Alaska 2002) ("The trial court is required to enter sufficiently detailed findings of  


fact to allow for meaningful appellate review.").  


                                                                                                                                                      -18-                                                                                                                                               7421

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

                                     2.	 	             The superior court did not make adequate findings to support   

                                                       its calculation of Sharon's income or the applicable deductions.                                                                                      

                                     When a parent is self-employed, the commentary to Civil Rule 90.3 defines                                                                                                             

that parent's income as "the gross receipts minus the ordinary and necessary expenses                                                    


required to produce the income."                                                                                                                                                                                          

                                                                                                  Here the superior court found that Sharon's income  


"fluctuated between $15,000 and $25,000 before and during the marriage" and that it  


derived from multiple "sources including her small business, contract work[,] and a  


variety of part-time jobs."  It determined Sharon's total annual income for child support  


purposes to be $23,100, and her adjusted annual income after deductions to be $19,808.  


                                     But based on the available evidence, this appears to overestimate Sharon's  


income.   The income history on her 2016 Social Security statement shows that her  


taxable earnings between 2005 and 2015 averaged roughly $10,656 per year.  Her 2015  


tax  return  lists  a  gross  income  of  $30,949  from self-employment  and  expenses  of  


$17,455, yielding a net income of $13,494.  Her 2016 tax return shows that she grossed  


$2,500 that year, with a net loss after expenses.  And she testified that her gross income  


for 2017 was $21,655.   The superior court stated that its income determination for  


Sharon was based on "her work history, her degrees[,] and current employment status,"  


but the court's findings do not explain how it determined her income or what, if any,  



expenses it took into account. 

                  42	 	              Alaska R. Civ. P. 90.3(a)(1)(A)-(E).             

                  43                 We note that not all expenses that may be deducted for federal tax purposes                                                                                                      

necessarily qualify as "ordinary and necessary" expenses for purposes of Rule 90.3.                                                                                                                                                              

See  Alaska R. Civ. P. 90.3 cmt. III.B ("Ordinary and necessary expenses do not include                                                                                                                                   

amounts allowable by the [Internal Revenue Service] for the accelerated component of                                                                                                                                                    

depreciationexpenses, investment tax credits, or anyotherbusiness expenses determined                                                                                                                           

by the court to be inappropriate.").              

                                                                                                                  -19-	                                                                                                         7421

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

                    If the court determines that a parent is "voluntarily and unreasonably . . .  

unemployed or underemployed," the rule permits the court to impute income based on  


the   parent's   employment   history   and   qualifications   as   well   as   available   job  


                     44  The trial court must make findings sufficient for our review that justify  


imputing income, such as that the parent is capable of earning more than his or her  


current income or that higher-paying jobs are actually available.45  


                    The superior court's estimationofSharon'sincomeseems toimpute income  


higher than that supported by the evidence.46                      To the extent that it did, its decision lacks  


the findings necessary to justify imputation. The decision to impute potential income to  


a parent who "voluntarily and unreasonably is unemployed or underemployed" must be  


based on "the parent's work history, qualifications, and job opportunities."47                                     We have  


required findings about the parent's education and qualifications or about available job  


opportunities to enable meaningful review.48                          Here the court found that Sharon and  


Everett were both "relatively young . . . and in good health," and that while Sharon's  


earning capacity was lower than Everett's, "[s]he does have a college degree and skills  


that make her employable."   While these findings indicate that the court considered  


          44        Alaska  R.  Civ.  P.  90.3(a)(4)  &  cmt.  III.C.  

          45        Frederickson   v.   Button,   426   P.3d    1047,    1058-1060   (Alaska   2018)  

(approving  implied  finding  of  unreasonableness  based  upon  evidence  presented);  see  

also  Petrilla  v.  Petrilla,  305  P.3d  302,  307  (Alaska  2013);  O'Connell  v.  Christenson,  75  

P.3d   1037,   1040-41  (Alaska  2003).   

          46        If the evidence demonstrated a prima facie case of voluntary unreasonable  


underemployment,  then  the  burden  of  rebutting  that  evidence  would  be  Sharon's.  


Frederickson, 426 P.3d at 1059.  


          47        Alaska R. Civ. P. 90.3(a)(4).  


          48        See, e.g., Horne v. Touhakis, 356 P.3d 280, 284 (Alaska 2015).  


                                                             -20-                                                        7421

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

Sharon's qualifications and job opportunities in calculating a higher income for child                                                                                                                                                                                       

support purposes than her work history might indicate,                                                                                                                                            the court made no specific                                       

findings on the particular skills or qualifications Sharon's degree and experience gave                                                                                                                                                 

her, or on the availability of jobs matching those qualifications in Naknek.                                                                                                                                                                               The court   

made no findings that Sharon was unreasonably or voluntarily under- or unemployed,  

finding   only   that   she   "stayed   home   with   the   children   for   much   of   the   couple's  


                                            Finally,   as   with   Everett,   the   court   did   not  explain  its   calculation   of  

deductions from Sharon's income.                                                                                   Its order stated only that "[a]fter applying allowable                                                                                     

deductions, Sharon's annual adjusted income is $19,808." We therefore remand for the                                                                                                                                                                                                

court to make the findings necessary to support both its income calculation for Sharon                                                                                                                                                                     

and any deductions it applies.                                                                      

                                            We note, however, that the court is not required to use earning histories                                                                                                                                             

from exactly the same time period for Sharon and Everett, as Sharon argues.                                                                                                                                                                               Given that   

each parent's income is variable and derives from different sources, it is within the                                                                                                                                                                                              

superior court's discretion to determine what past periods provide the best indicator of                                                                                                                                                                                               

                                                                                                   49           But  its  income  calculations  must  be  supported  by  

each   parent's   future   income.                                                                                                                                                                                                                                                  

sufficiently detailed findings.50  


                      C.	 	                 It  Was  An  Abuse  Of  Discretion  To  Divide  The  Fishing  Vessel  


                                            Unequally In Everett's Favor, And The Equalization Payment And  


                                            Attorney's Fees Award Must Be Reconsidered In Light Of This.  


                                            Equitable division of marital assets in a divorce proceeding involves three  


steps:  "(1) deciding what specific property is available for distribution, (2) finding the  


                      49                    See  Morris  v.  Horn,  219  P.3d   198,  206  (Alaska  2009).   

                      50                    See  Olmstead  v.  Ziegler,  42  P.3d   1102,   1107  (Alaska  2002).  

                                                                                                                                         -21-                                                                                                                                               7421  

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


value of the property, and (3) dividing the property equitably."                                                      Generally "only marital        

property is subject to division upon divorce," and separate property may be invaded                                                                

                                                                                                                                       52  While "[a]n  

"only 'when the balancing of the equities between the parties requires it.' "                                                                            

equal division of marital property is presumptively just,"53 the court may deviate from  


an equal division based on the factors enumerated in AS 25.24.160:  


                         (A) the length of the marriage and station in life of the parties  


                         during the marriage;  


                         (B) the age and health of the parties;  


                         (C)  the  earning  capacity  of  the  parties,  including  their  


                         educational backgrounds, training, employment skills, work  


                         experiences,  length  of  absence  from  the  job  market,  and  


                         custodial responsibilities for children during the marriage;  


                         (D)  the  financial  condition  of  the  parties,  including  the  


                         availability and cost of health insurance;  


                         . . . .  


                         (G) the circumstances and necessities of each party;  


                         (H) the time and manner of acquisition of the property in  


                         question; and  


                         (I) the income-producing capacity of the property and the  


                         value of the property at the time of division.[54]  


             51          Fletcher   v.   Fletcher,   433   P.3d   1148,   1152   (Alaska   2018)   (quoting  

Engstrom v. Engstrom                      , 350 P.3d 766, 769 (Alaska 2015)).                   

             52          Kessler   v.   Kessler,   411   P.3d   616,   618   (Alaska   2018)   (quoting  


AS 25.24.160(a)(4)).  


             53          Pfeil v. Lock, 311 P.3d 649, 652-53 (Alaska 2013) (quoting Berry v. Berry,  


978 P.2d 93, 96 (Alaska 1999)).  


             54          AS 25.24.160(a)(4).   These factors are also referred to as the "Merrill  


factors," since AS 25.24.160(a)(4) codified and expanded the factors we listed in Merrill  



                                                                             -22-                                                                       7421

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

These factors are not exhaustive; a court "may consider 'any other factors it deems                                                                                                                                                                                                                                                               

relevant' to dividing the property," provided "the division is 'just' and 'fair.' "                                                                                                                                                                                                                                                      55  

                                                         Sharon contends that the superior court made several errors in its property  


division: it treated one of Everett's fishing boats, the F/V N 

                                                                                                                                                                                                                                                        ORTHERN  FLYER, differently   

than the rest of the marital estate despite the fact that the boat was marital property; it                                                                                                                                                                                                                                                                             

inequitably divided the rest of the estate; and it improperly allowed Everett four years                                                                                                                                                                                                                                                               

to make the equalization payment that it ordered.                                                                                                                                                                Everett responds that the decision to                                                                                                                

award him more of the equity in the F/V N                                                                                                                                       ORTHERN  FLYER  than in the rest of the marital                                                                                                                  

estate was justified by Sharon's minimal involvement in his fishing business. He argues                                                                                                                                                                                                                                                            

that it was equitable for the court to divide the rest of the marital estate 55/45 in Sharon's                                                                                                                                                                                                                                          

favor, with the slightly unequal division enabling her to litigate on an equal footing. And                                                                                                                                                                                                                                                                 

he contends that allowing himfour years to make the equalization payment properly took                                                                                                                                                                                                                                                                      

into account his fluctuating income and lack of liquid assets.                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                     ORTHERN  FLYER  should  

                                                         1.	 	                       Based on the court's findings, the F/VN 

                                                                                     have been divided on the same or similar terms as the rest of the                                                                                                                                                                                                           

                                                                                     marital estate.   

                                                        Unless an exception applies, property acquired by a spouse prior to the                                                                                                                                                                                                                                 

marriage is considered separate property; property acquired by a spouse during the                                                                                                                                                                                                                                                                              


marriage is marital property.                                                                                                                                                                                                                                                                                     

                                                                                                                                       Ordinarily, " 'all assets acquired by the parties during  

                            54                           (...continued)  

v.  Merrill,  368  P.2d  546,  547-48  n.4  (Alaska  1962).   See  Cartee  v.  Cartee,  239  P.3d  707,  

712  n.9  (Alaska  2010).  

                            55                          Pfeil,  311  P.3d  at  653  (quoting  Cartee,  239  P.3d  at  712-13).   

                            56                          Kessler, 411 P.3d at 618.  


                                                                                                                                                                               -23-	                                                                                                                                                                      7421

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


their marriage are marital property' except for gifts and inheritances."                                                                                                                                                                                        The parties do                              

not dispute that Everett purchased the F/V N                                                                                                                          ORTHERN   FLYER, a commercial fishing                                                                                

vessel, during their marriage.  They and the court valued this vessel at $255,000.  The                                                                                                                                      

court divided the equity in the vessel 70/30 in Everett's favor, though it divided the rest                                                                                                                                                                                                            

of the marital estate 55/45 in Sharon's favor.                                                                                                                    Sharon argues that there was no basis to                                                   

divide the vessel differently than the rest of the marital estate, while Everett argues that                                                                                                                                                                                                           

the uneven split properly took into account Sharon's lack of involvement in his fishing                                                                                                                                                                                                     

business, as well as the fact that his fishing experience enabled him to purchase and                                                                                                                                                                                                                  

maintain the vessel.                                                      

                                                While marital property may be unequally divided, such a division must be                                                                                                                                                                                    

                                                                                                                                                                                              58        The court abuses its discretion  

equitable based on the factors in AS 25.24.160(a)(4).                                                                                                                                                                                                                            

if it "considers improper factors, fails to consider statutorily mandated factors, or gives  


too much weight to some factors."59  Because Alaska favors addressing parties' financial  


needs through property division rather than alimony, "[w]hen a couple has sufficient  


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


in the property distribution to aid him or her in [the post-divorce] transition."60  


                                                Here the superior court found that the F/V N                                                                                                                    ORTHERN  FLYER  was part of  


the marital estate, finding that its use "in the commercial fishery, alone, is not a valid                                                                                                                                                                                                     

exception to a finding of marital property." The court also found that, although a fishing                                                                                                                                                                                              

                        57                     Beals v. Beals                                     , 303 P.3d 453, 460 (Alaska 2013) (quoting                                                                                                                 Johns v. Johns                                        ,  

945 P.2d 1222, 1225 (Alaska 1997)).                                                                                                    

                        58                      See Pfeil, 311 P.3d at 653; AS 25.24.160(a)(4).  


                        59                      Cartee, 239 P.3d at 714 (quoting Long v. Long, 816 P.2d 145, 150 (Alaska  


 1991) (addressing abuse of discretion in custody determinations)).  


                        60                     Dundas v. Dundas, 362 P.3d 468, 480 (Alaska 2015) (second alteration in  


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


                                                                                                                                                   -24-                                                                                                                                            7421

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

enterprise, if "treated like a typical business," might "be categorized as separate property                                                                                                                                                                         

and the vessel [as] a business asset," there was "no evidence that Everett had a business                                                                                                                                                                         

license or that his fishing business was an incorporated entity."                                                                                                                                                   The court nevertheless             

awarded 70% of the equity in the F/VN 

                                                                                                                                 ORTHERN  FLYER  to Everett: "Everett's                                                                                          extensive  

pre-marital experience in the fishery provided him with the opportunity and resources   

to purchase the F/V N                                                       ORTHERN   FLYER.    An equitable distribution must acknowledge                                                                                                          

Everett's contributions to the purchase, maintenance and operation of the vessel."                                                                                                                                                                                                  

                                             Given that the court found the F/VN                                                                                   ORTHERN  FLYER  to be marital property                                                            

and determined that an equitable division would award Sharon                                                                                                                                                                   55% of the marital                       

estate - findings Everett does not dispute - a different division of the fishing vessel                                                                                                         

would only be warranted if Everett demonstrated that an exception applied or that the                                                                                                                                              

relevant statutory factors justified treating the vessel differently from the rest of the                                                                                                                                                                                             

                     61  But he does not assert, and the court did not find, that the F/VN                                                                                                                                                 ORTHERN  FLYER  


was a gift or inheritance and thus an exception to the rule that property acquired during                                                                                                                                                                                  

                                                                             62   Nor is the boat a personal or nontransferable asset such as an  

the marriage is marital.                                                                                                                                                                                                                                                                 

educational degree or unmarketable professional goodwill belonging to one spouse that  


would properly be excluded from the marital estate.63                                                                                                                                        It is a tangible asset acquired  


                      61                     See Dragseth v. Dragseth                                                            , 210 P.3d 1206, 1212 (Alaska 2009) ("The party                                                                                                

seeking to establish that the property is separate always bears that burden of proof."                                                                                                                                                                                  

(quoting  Schmitz v. Schmitz                                                                 , 88 P.3d 1116, 1128 (Alaska 2004))).                                                               

                      62                     See Beals, 303 P.3d at 460.  


                      63                     See  Richmond  v.  Richmond,  779  P.2d  1211,  1213-14  (Alaska  1989)  


(holding that law practice belonging to one spouse had no marketable professional  


goodwill and thus should not be divided as part of marital estate), overruled in part on  


other grounds by Hansen v. Hansen, 119 P.3d 1005, 1010 & n.16 (Alaska 2005); Nelson  


v. Nelson, 736 P.2d 1145, 1146 (Alaska 1987) (holding that professional degreeobtained  



                                                                                                                                          -25-                                                                                                                                   7421

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

during the marriage, and it is therefore subject to division according to the factors in                                                                                                          

AS 25.24.160(a).                          

                               And Everett did not demonstrate that the statutory factors favored him.                                                                                                   

Most of the court's findings on the statutory factors either weigh equally for both parties                                                                                             

or favor Sharon.                       The court first found that both spouses were "relatively young . . . and                                                                              

in good health" at the time of divorce and that "they had already                                                                                               established their   

respective professions" when they married - findings that would seem to support an                                                                                                               

                                                       64    But the court also found that Sharon's earning capacity was  

equal property division.                                                                                                                                                                      

significantly lower than Everett's and likely would be for some time; that she had stayed  


home to care for the children for much of the marriage, including during Everett's fishing  


trips; and that Everett had healthcare coverage through Indian Health Services while  


                                                                                                                 65     Additionally, the court found that  

Sharon would have to pay for private insurance.                                                                                                                                               


even though Sharon had never served as a crew member, "her assistance around the  


fishing season contributed to the fishing business"; Everett had on at least one occasion  


paid her a $5,000 crew share. And as Sharon points out, the fishing vessel will continue  


to generate income for Everett in the future.66                                                                These factors would seem to support  


               63              (...continued)  


by one spouse is not marital property subject to division upon divorce).  

               64              See  AS  25.24.160(a)(4)(A)-(B)  (listing  as  factors  "the  length  of  the  


marriage," the spouses' "station in life" during marriage, and "the age and health of the  



               65              See AS 25.24.160(a)(4)(C), (D), (G) (listing as factors parties' respective  


earning capacities in light oftheir education, qualifications, and childcareresponsibilities  


duringmarriage; parties' financial condition "includingtheavailabilityand cost of health  


insurance"; and "the circumstances and necessities of each party").  


               66              See AS25.24.160(a)(4)(I) (listing as factor "theincome-producingcapacity  



                                                                                               -26-                                                                                        7421

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deviating in Sharon's favor from an equal division - which the court did with the rest                                                                             

of the marital estate.                    

                          The only factor in Everett's favor was the fact that his fishing expertise and                                                           

                                                                                                                                                             67   But  

income were what allowed him to purchase and generate income from the vessel.                                                                                      

even if one spouse's qualifications allow a couple to acquire an asset, that fact does not  


by itself alter the marital character of that asset.  In the case of corporate good will, for  


instance, we have held that "earning capacity attributable solely to the expertise, talents  


and personality of one spouse" may properly be part of the marital estate,68 provided that  


the goodwill is marketable and could be sold to a prospective buyer.69                                                                        We have also  


noted that an unequal property division can be used to compensate one spouse for  


providing support that allows another to increase his or her earning capacity, such as by  


                                                            70    Sharon contributed to Everett's earning capacity by  

earning a professional degree.                                                                                                                                       


caring for the children and providing shore support while he fished; her support may  


have helped make possible the purchase of the fishing vessel in the first place.  And  


             66           (...continued)  


of the property").  

             67           See   AS   25.24.160(a)(4)(H)   (listing   as   factor   "the   time   and   manner   of  

acquisition of the property in question").  


             68             Richmond,  779 P.2d  at 1213,  overruled in  part on  other grounds by  


Hansen, 119 P.3d at 1010 & n.16.  


             69           Hansen, 119 P.3d at 1010 ("If the goodwill is not marketable, then no value  


for goodwill should be considered in dividing the marital assets."); accord Moffitt v.  


Moffitt, 749 P.2d 343, 347 (Alaska 1988).  


             70           Nelson v. Nelson, 736 P.2d 1145, 1146-47 (Alaska 1987) (holding that  


while "professional degree is not property subject to division," spouse's contributions  

to increase in earning potential of spouse who earned degree "may justify a favorable  


award of property to the supporting spouse").  


                                                                                 -27-                                                                           7421

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Everett did not present evidence that would justify either treating the F/V N 


FLYER  as separate property or deviating so greatly from the division applied to the rest                                                                                                                                                                                                                                                                                                                                                        

of the marital estate.                                                                                     In fact, the court specifically discounted the credibility of some of                                                                                                                                                                                                                                                                         

Everett's testimony about his fishing business and the extent of Sharon's assistance with                                                                                                                                                                                                                                                                                                                                                    


                                                                      We also note that although the court decided on a 55/45 split of the rest of                                                                                                                                                                                                                                                                                                       

the marital estate in Sharon's favor, its 70/30 division of the F/V N                                                                                                                                                                                                                                                                                                        ORTHERN   FLYER  

resulted   in   Sharon   being   awarded   roughly   $87,137   of   the   total   estate   and   Everett  

receiving roughly $139,695 - an approximately 62/38 split in                                                                                                                                                                                                                                                                              Everett's  favor.   Given  

the court's findings on the parties' respective earning capacities and the paucity of                                                                                                                                                                                                                                                                                                                                                                  

 evidence that would justify treating the fishing vessel differently from the rest of the                                                                                                                                                                                                                                                                                                                                                          

marital property, this division was clearly unjust.                                                                                                                                                                                                                

                                                                      We   therefore   vacate   the   court's   award   of   70%   of   the   equity   in  the  

                                ORTHERN  FLYER  to Everett and remand the property division to the superior court                                                                                                                                                                                                                                                                                                                        

F/V N 

 so that the marital estate, including the F/V N                                                                                                                                                                                        ORTHERN  FLYER, may be equitably divided                                                                                                                                             

pursuant to AS 25.24.160(a)(4).                                                                                                                                           

                                                                      2.	 	                              The equalization payment must be recalculated in light of our                                                                                                                                                                                                                                                                          

                                                                                                         decision on the property division.                                                                                                        

                                                                      The court's decision to divide the F/V N                                                                                                                                                                       ORTHERN  FLYER's equity 70/30 in                                                                                                                                     

Everett's favor and the remainder of the marital estate 55/45 in Sharon's favor resulted                                                                                                                                                                                                                                                                                                                                  

in Everett owing Sharon an equalization payment of $84,537.60. But because we vacate                                                                                                                                                                                                                                                                                                                                               

the property division on the ground that the fishing vessel should not have been treated                                                                                                                                                                                                                                                                                                                                        

differently than the other marital assets, the value of the equalization payment will                                                                                                                                                                                                                                                                                                                                                        

necessarily change on remand. We therefore remand so that the equalization amount can                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                        -28-	                                                                                                                                                                                                              7421

----------------------- Page 29-----------------------

be calculated in light of an equitable division that comports with this opinion.                                                                                     71  


                            Assuming that the equalization amount determined on remand continues  


to be a sum too large for Everett to make in a single payment, the superior court has  


discretion to order a multi-year payment schedule.  In establishing such a schedule, the  


court must pay careful attention to each party's financial circumstances, including any  


potential  hardship  Sharon  may  suffer  from  the  delay  in  receiving  the  equalization  

                    72  The superior court gave Everett four years to make the equalization payment,  


with interest accruing at 5% per year.   But without a prescribed schedule of regular  


payments, the court left it to Everett's good will, and desire to avoid interest payments,  


to  ensure  that  Sharon  received  the  equalization  payment  in  less  than  four  years.  


Particularly since the court declined to award Sharon attorney's fees because it preferred  


to place the parties on equal litigation footing by means of the property division, the  


failure to establish a payment schedule was error.73  


              71            Because we reverse the property division based on the superior court's                                                                       

treatment of the F/V N                         ORTHERN  FLYER, and because a new property division on remand                                                             

will affect the total amounts Sharon and Everett will receive, we do not reach Sharon's                                                                              

argument that the 55/45 division of the rest of the estate was inequitable.                                                       

              72            Fortson v. Fortson, 131 P.3d 451, 459 (Alaska 2006) (holding that an  


eighteen month pay period was appropriate); see also Hunt v. Hunt, 698 P.2d 1168, 1191  


(Alaska 1985) (holding that the superior court did not abuse its discretion for a three-year  


payout period).  


              73            See, e.g., Rosenberg v. Rosenberg, No. S-16968, 2019 WL 3715062, *3-4  


(Alaska  Aug.  7,  2019)  (upholding  payment  schedule  and  accrual  of  interest  for  


equalization payment).  


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                           3.	 	        Attorney's fees must be revisited in light of our decision on the                                                             

                                        property division.   

                           Attorney's fee awards in divorce cases lie "within the broad discretion of                                                                    

the trial court and will not be disturbed on appeal unless [they are] 'arbitrary, capricious,                                                          


or manifestly unreasonable.' "                                                                                                                             

                                                                  While "[a] prevailing party in a civil case is normally  



entitled to an award of attorney's fees,"                                         in divorce cases, awards of attorney's fees are  


generally  based  not on  prevailing  party status but on  the spouses'  relative earning  



capacities and economic positions.                                      Because "[t]he purpose of awarding attorney's fees  


in divorce proceedings is to level the playing field," the court must consider "not only  


earning capacities and separate resources, but also the distribution of marital assets  

              77   A court may also order a party who has acted in bad faith or vexatiously to pay  


enhanced attorney's fees.78  



                                                         If awarding enhanced fees, the court must first determine  


appropriate fees based on each parties' economic status and then increase the award  



based on a party's misconduct. 

             74           Berry   v.  Berry,   277   P.3d   771,   779   (Alaska   2012)   (quoting  Ferguson   v.  

Ferguson,   195  P.3d   127,   130  (Alaska  2008)).   

             75             Johnson  v.  Johnson,  239  P.3d  393,  399  (Alaska  2010);  see  Alaska  R.  Civ.  

P.  82(a).   

             76            See Berry, 277 P.3d at 779 (quoting Johnson, 239 P.3d at 399).  


             77           Id. (alteration in original) (quoting Dragseth v. Dragseth, 210 P.3d 1206,  


 1212 (Alaska 2009)).  


             78           Id. at 799-80 (quoting Edelman v. Edelman, 61 P.3d 1, 5-6 (Alaska 2002)).  


             79           Id. (quoting Edelman, 61 P.3d at 5-6).  


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                                                                         The  court  found  that  "Everett  has  had  a  significantly  higher  earning  


 capacity" than Sharon, but declined to issue an award of attorney's fees, finding that the  

                                                                                                                                                                                                                                                                                                                          ORTHERN  FLYER) put Sharon                                                                                            

 55/45 division of the marital estate (excluding the F/V N 

 and Everett "on equal ground to afford . . . litigation."                                                                                                                                                                                                                                             The superior court also rejected                                                                                                     

 Sharon's request for an enhanced fee award, finding that Everett's conduct did not rise                                                                                                                                                                                                                                                                                                                                                                            

to the level of bad-faith or vexatious conduct that would warrant enhanced fees.                                                                                                                                                                                                                                                                                                                                                                       

                                                                         Because the court addressed attorney's fees through the property division,                                                                                                                                                                                                                                                                                      

 and because we vacate and remand the property division, the court must also reconsider                                                                                                                                                                                                                                                                                                                                        

 attorney's fees on remand. A property division that comports with this opinion may also                                                                                                                                                                                                                                                                                                                                                                          

 adequately address the issue of fees.                                                                                                                                                                   

                                                                         However, we point out that the structure of the attorney's fees decision                                                                                                                                                                                                                                                             

issued by the superior court left Sharon, in practice, unable to litigate on an equal                                                                                                                                                                                                                                                                                                                                                                   

 footing.   The court gave Everett four years to make the equalization payment, ordering                                                                                                                                                                                                                                                                                                                                                 

that interest would accrue at 5% per year but not requiring specific installments or partial                                                                                                                                                                                                                                                                                                                                                         

payments to be made earlier. In the meantime, although the court had already found that                                                                                                                                                                                                                                                                                                                                                                             

 Sharon "could not litigate the divorce on fairly equal footing without contributions from                                                                                                                                                                                                                                                                                                                                                                    

Everett," Sharon retained only $2,599 in marital assets based on the court's division of                                                                                                                                                                                                                                                                                                                                                                                    

property, while Everett retained $219,233.                                                                                                                                                                                                As a practical matter, therefore, the court's                                                                                                                                                          

use of the property division to address attorney's fees left Sharon without funds to afford                                                                                                                                                                                                                                                                                                                                                            

litigation   on  an  equal  footing   unless   Everett   decided   to   make   at   least   part   of   the  

 equalization payment immediately.                                                                                                                                                                 

                                                                         Equitable division of marital assets is one                                                                                                                                                                                 factor to consider in an attorney's                                                                                         

 fees award.  But where significant economic disparity exists between the spouses, and                                                                                                                                                                

where the property division may not be effectuated for a significant period of time,                                                                                                                                                                                                                                                                                                                                                                      

relying solely on the property division to address attorney's fees unfairly burdens the                                                                                                                                                                                                                                                                                                                                                                               

 spouse with lower earning capacity and fewer assets and thwarts the purposes of the                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                  -31-                                                                                                                                                                                                                        7421

----------------------- Page 32-----------------------


exceptions set forth in AS 25.24.160.   In these circumstances, the court's failure to  


consider the practical effect of neither awarding separate attorney's fees nor requiring  


a payment schedule for the equalization payment was an abuse of discretion.  

V.                   CONCLUSION  

                                         Because the superior court's findings with regard to the parents' capacity                                                                                                                           

to provide for their children's needs were not clearly erroneous, we AFFIRMthe custody                                                                                                                                                          

determination.     We   VACATE   and   REMAND   the   child   support  award   for   further  

findings to explain the calculations of the parents' income.                                                                                                                                We also VACATE and                                              

REMAND the property division, and the decision on attorney's fees that relies on it, to                                                                                                                                                                           


be recalculated in light of this opinion.  

                                                                                                                              -32-                                                                                                                       7421

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