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Appeal from the Superior Court of the State of Alaska, Third Judicial District, Palmer, Eric Smith, Judge. Superior Court No. 3CO-11-00005 CI.
G.R. Eschbacher and Justin Eschbacher, Anchorage, for Appellant.
Rhonda F. Butterfield, Wyatt & Butterfield, LLC, Anchorage, for Appellee.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.
A couple filed for divorce, but the divorce was not finalized for nearly three-and-a-half years. In the interim the couple continued to treat certain bank accounts as marital and others as separate, making it difficult for the superior court to later determine when the joint marital enterprise ended and how to value the bank accounts. This appeal presents issues under each step of the equitable distribution process -- identification, valuation, and distribution -- as well as issues of alimony, child visitation expenses, and child support credits. As set forth below, we remand for further proceedings on a number of these issues.
II. FACTS AND PROCEEDINGS
Dea and James Dundas married in 1997 after a lengthy relationship. James began commercial fishing in the early 1990s, and in 1992 attended heavy equipment school in Washington. In 1993 Dea received an associate's degree in marketing, management, and business from an Oregon community college. In the late 1990s James and Dea began operating a bed and breakfast (B& B). They later acquired a home on the same road as their B& B and constructed a large shop adjacent to their home. James and Dea formed Dundas, Inc. -- a construction company focusing on excavation -- with Dea owning 60% and James 40%; they acquired a gravel pit (pit property) for storing equipment. James worked seasonally for the State plowing snow from roads; as a Public Employees' Retirement System (PERS) Tier 3 employee, James's job with the State provided health insurance for the family. James also worked as an on-call oil spill responder for Alyeska.
Dea raised their two sons, operated the B& B, kept the books for their businesses, and filed their taxes. Dea also was an expediter for the fishing and construction businesses, purchasing and delivering supplies to job sites and to James's boat. According to Dea, James is one of the best heavy equipment operators in the area, and James acknowledges that Dea's hard work was a substantial reason for their financial success. Through their industry and skill, James and Dea acquired roughly $1.7 million in marital assets.
In January 2011 Dea filed for divorce, and James moved out of the marital home later that year. On October 25, 2012 they attended
a mediation session with a retired judge and agreed to treat all funds currently in their bank accounts as marital but to treat all future earnings as separate.
Before trial Dea informed the court that she planned to relocate to Oregon with the children to pursue higher education and be closer to her family. Dea requested 65% of the marital property, both rehabilitative and reorientation alimony, and attorney's fees. Before trial James requested a 50/50 marital property division and argued that Dea should not be awarded alimony or attorney's fees. The divorce trial lasted five days between May 2013 and February 2014.
Dea hired a financial expert, Sheila Miller, who prepared Dea's property spreadsheet and valued the parties' bank accounts and annual cash flows between 2011 and 2013. Miller entered both the bank account and cash flow values as marital property on Dea's proposed property spreadsheet. During trial Miller testified at length, and the court found her testimony credible.
In early April 2014 the court ordered Dea to pay all of the children's visitation expenses if she chose to relocate to Oregon. In late April the court issued findings of fact and conclusions of law. The court determined that James and Dea ceased functioning as an economic unit on October 25, 2012, the date of their mediated agreement. The court valued the parties' bank accounts according to Miller's testimony, but it disregarded Miller's separate cash flow analysis.
The court divided the parties' substantial marital property equally, awarding Dea the B& B, the pit property, and proceeds from heavy equipment sold during trial. The court gave James a credit for his estimated 2013 income tax liability. The court also ordered James to pay child support from October 25, 2012 onward, but credited marital expenses he had paid in 2012 and 2013 against his arrearage. On reconsideration the court denied Dea's renewed request for attorney's fees and her request that she not pay the children's full visitation expenses.
Dea appeals, primarily challenging the superior court's decisions on: (1) the parties' economic separation date; (2) the marital property distribution; (3) James's credit for his 2013 income tax liability; (4) James's potential PERS retirement health benefits; (5) the valuation of certain marital accounts, properties, and cash flows; (6) the tax liabilities associated with the sales of marital property awarded to Dea; (7) her alimony requests; (8) the children's visitation expenses; (9) James's child support credit; and (10) her attorney's fees request.
A. Economic Separation Date
We have characterized the separation date as when " 'the marriage has terminated as a joint enterprise' or when a couple is no longer 'functioning economically as a single unit.'"  Because the separation date may determine whether acquired property is marital or separate, this date is critical to the identification and valuation of the marital estate; it " should ideally be set at the actual termination point of the marital partnership, so that assets which are not actual fruits of the parties' joint efforts are not included in the marital estate."  Determining " the separation date is a fact-specific inquiry,"  and the superior court accordingly has considerable discretion in this area. We have affirmed
separation date determinations based upon various factors, but one party's " continuing economic dependence alone does not indicate the continuance of the marital economic unit." 
The superior court determined that James and Dea " basically acted as a married couple" up until July 2012, when marriage counseling efforts failed. The court concluded that the parties ceased to function as an economic unit on October 25, 2012 -- the date of their mediated agreement -- for three reasons. First, on that date they each agreed to " work on a marital business but [to] treat that income as separate." Second, finding on these facts that a marital partnership continued " would mean that no couple ever could separate as long as one continued to operate a marital business." And finally, from that date onward, Dea operated the B& B while James fished and fulfilled his oil spill response contract " without any real input or involvement from the other party."
Dea argues the court abused its discretion by selecting October 25, 2012 as the parties' economic separation date because neither party advocated for this date at trial, the evidence supports using the date of divorce, and at the October 25 mediation both parties believed the divorce trial would commence in a few months when in fact it began in May 2013 and concluded in February 2014. But the record reflects that when James left to fish in July 2012 -- and certainly by October 25 when Dea and James entered into their mediated agreement -- there was no real hope of reviving the marriage. They attended mediation in part to impose order on their contentious relationship, agreeing on " boundaries" with respect to each other's privacy and new romantic partners and setting rules pending a final divorce.
In fixing the date of economic separation, the superior court discussed relevant Alaska case law, noted " the fact that the parties are economically interdependent or that their finances remain commingled does not, of itself, mean that the 'marital economic unit'/'marital enterprise' continued," and thoroughly explained its reasoning. We conclude that the superior court did not abuse its discretion by determining that the parties ceased functioning as a joint marital unit on October 25, 2012.
B. Marital Property
The equitable distribution of the marital estate involves three basic steps: " (1) [identifying] what specific property is available for distribution, (2) finding the value of the property, and (3) dividing the property equitably."  " Factual findings supporting marital property distribution 'must be sufficient to indicate a factual basis for the conclusion reached.'" 
Because we are remanding to the superior court for further findings and clarification about a number of issues, including: (1) the identification and valuation of certain marital property; (2) Dea's alimony requests; and (3) the impact of tax consequences on the equitable distribution of the parties' marital property, we do not reach the question whether the court's equal division of marital property was within the bounds of its discretion.
1. Identification and valuation
The superior court's identification of property available for ...