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Beals v. Beals

Supreme Court of Alaska

June 28, 2013

PATRICIA A. BEALS, Appellant,
v.
MARK L. BEALS, Appellee.

Appeal from the Superior Court No. 3AN-08-12700 CI of the State of Alaska, Third Judicial District, Anchorage, Eric A. Aarseth, Judge.

Jacob A. Sonneborn, Ashburn & Mason, P.C., Anchorage, for Appellant.

Shana Theiler, Walton, Theiler & Winegarden, LLC, Kenai, for Appellee.

Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.

OPINION

FABE, Chief Justice.

I. INTRODUCTION

Patricia Beals challenges the superior court's property division in a divorce case. Patricia argues that the superior court incorrectly characterized as separate property a lot that she and her former husband, Mark Beals, jointly purchased with cash obtained from refinancing their marital home, which Mark had owned before their marriage. Patricia also contends that the superior court erroneously valued the mortgage on their marital home as of the time of separation rather than the time of trial. Because the entire value of the jointly titled lot should have been characterized as marital property and because the home equity should have been valued as of the time of trial, we reverse.

II. FACTS AND PROCEEDINGS

Patricia and Mark Beals married in November 2000 and permanently separated in November 2008. They divorced in 2011. Mark had children from a previous relationship, and together Mark and Patricia had two children.[1] The superior court issued its findings of fact and conclusions of law concerning the division of property in February 2012. [2] Patricia filed a motion to reconsider, which the superior court denied. This appeal followed.

A. The 534 Second Avenue Home And 528 Second Avenue Lot

When Patricia and Mark married, Mark already owned a house at 534 Second Avenue in Seward. They lived there together for their first six years of marriage. In 2001, about one year after their marriage, Mark and Patricia refinanced the 534 Second Avenue home and placed the title and mortgage in both of their names. From the refinancing, they converted $42, 092 of equity to cash. They used this cash to buy the adjacent lot at 528 Second Avenue, again placing the title in both of their names.

After the refinance, both Patricia and Mark contributed to the mortgage payments for their 534 Second Avenue home. Until 2006, when they bought another home, Patricia and Mark continued to live in the house at 534 Second Avenue. The parties agree that the 534 Second Avenue residence transmuted into marital property.

Patricia filed for divorce in 2008. Trial was held on November 9 and 17, 2011 and January 19, 2012 before Superior Court Judge Eric A. Aarseth. Patricia was represented by counsel and Mark represented himself.

At trial, Mark testified about refinancing the marital home and described the parties' "conscious decision" to use the cash they received from the financing "to jointly . . . purchase the [adjacent] Second Avenue [lot]." He also explained that "we wanted the piece of property next door" and "[w]e used the equity [from the home] to buy this Second Avenue lot."

In February 2012 the superior court issued a decision dividing the marital property equally and ordering Mark to pay an equalization payment of $80, 172.17.[3] The superior court found that "Mark came to the marriage with assets and Patty came to the marriage with debt." "[B]ased on the comparison of their incomes, retirements and non-marital assets, " the superior court also found that "both parties were equally situated" at the end of the marriage. Accordingly, the superior court decided their situation warranted the presumed even distribution of the marital estate.[4]

Patricia argued at trial that the proceeds from the refinance of the marital home at 534 Second Avenue were marital. The superior court, however, concluded that these proceeds were Mark's separate property, reasoning that most of the Second Avenue home remained separate property because Patricia and Mark had only ...


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