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Tomal v. Anderson

Supreme Court of Alaska

August 31, 2018

DEWAYNE TOMAL, Appellant and Cross-Appellee,
v.
JEANNETTE ANDERSON, Appellee and Cross-Appellant.

          Appeal from the Superior Court of the State of Alaska, Superior Court No. 1WR-16-00034 CI First Judicial District, Wrangell, Kevin G. Miller, Judge pro tem.

          Robert S. Spitzfaden, Gruening & Spitzfaden, APC, Juneau, for Appellant/Cross-Appellee.

          Michael P. Nash, Law Offices of Michael P. Nash, P.C., Wrangell, for Appellee/Cross-Appellant.

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

          OPINION

          WINFREE, JUSTICE.

         I. INTRODUCTION

         Alaska has long recognized unique legal standards for property disputes between two people ending a domestic partnership. Our case law has treated the end of a domestic partnership as coextensive with both the end of a marriage-like relationship and the end of the partners' cohabitation, as has generally been the case in the appeals we have decided. But this appeal presents the novel factual circumstance of a couple who continued living together after their marriage-like relationship ended. We must therefore clarify several aspects of our domestic partnership case law to decide this appeal, including when and how a domestic partnership terminates, when post-partnership payments must be reimbursed, and how the trial court should award attorney's fees. Applying these clarified standards, we conclude that most of the trial court's property distribution was correct but that some minor aspects were in error. We therefore remand for the trial court to revise its property division.

         II. FACTS AND PROCEEDINGS

         DeWayne Tomal and Jeanette Anderson began living together in Wrangell in 1998. The following year Tomal bought beachfront land off the Zimovia highway (the Zimovia property); they began working to make it their permanent home. Anderson initially worked full time making the property habitable but later was sporadically employed, while Tomal sometimes worked on the property and sometimes earned money from other employment. The couple eventually restored a cabin on the property to serve as their primary home; they also docked Anderson's float house at the beach.

         Tomal began experiencing financial difficulties shortly after he and Anderson began living at the Zimovia property. They took out a loan secured by the property to pay some of his debts, and Tomal granted the property to himself and Anderson as tenants-in-common to secure financing. Anderson then took over managing the couple's finances; her practice was to transfer money from the couple's joint bank account into her personal savings account, where the funds earned interest, then back into the joint account to pay bills. Tomal and Anderson each deposited their earnings into the joint account and Anderson used the commingled funds to pay joint expenses like the mortgage, credit cards, and utilities.

         Tomal took a salaried construction job in 2005; he began accruing a pension and continued contributing his earnings to the joint account. His work required him to live away from the Zimovia property during the construction season, usually from March to November. Anderson continued living and working at the property.

         In July 2011 Tomal returned to the property during the construction season and discovered Anderson's money transfers from their joint account to her personal account. Tomal confronted Anderson and asked her not to transfer money into her personal account. Tomal then opened a separate bank account and began transferring money from the joint account into his separate account. Tomal also began depositing his earnings into and paying bills from the separate account. By the end of 2011 there was little money left in the joint account.

         Early in 2012 Anderson told Tomal that she would no longer sleep in the same house as him. When Tomal returned from his seasonal construction work in the following winters, Anderson slept in the float house while he was home. Anderson remained in the cabin in 2015, after living in the float house in the winter became too difficult to manage. The parties cooked their own meals, did their own laundry, and engaged in separate employment while living in the same home.

         Anderson obtained counsel in 2015 and proposed partitioning the Zimovia property. Tomal did not agree to the partition. Tomal filed suit against Anderson in 2016; he claimed that she was liable for her share of the Zimovia property expenses he had been paying and for unauthorized expenditures she had made with his earnings and credit card. Anderson denied making any unauthorized expenditures with Tomal's money and counterclaimed for a domestic partnership property division.

         The superior court held a three-day bench trial in February and March 2017. Tomal and Anderson both testified about their relationship, living arrangements, finances, and property. Tomal also presented testimony from a pension-valuation expert setting three different values for his pension based on when the relationship might have terminated, an accounting expert who analyzed the couple's financial transactions, and a real estate appraisal expert who valued the Zimovia property.

         The court issued a written decision in April dividing the property. The court found that Tomal had not proved his misappropriation claims and that the parties were in a domestic partnership requiring equal division of property. The court found that the domestic partnership terminated in 2012, when Anderson told Tomal she no longer would sleep in the same house as him. The court also resolved various valuation disputes and included about $50, 000 of Tomal's pension as partnership property. The court awarded Tomal the Zimovia property, valued at $275, 000, and ordered him to make Anderson an equalization payment of a little less than $100, 000. The court declined to credit Tomal for post-separation property expense payments, reasoning that "as cotenants, [the parties] continued to both contribute to the household in roughly equal fashion with ... Tomal making the necessary payments to maintain the household and ... Anderson doing other regular maintenance and upkeep."

         Tomal sought reconsideration of the denial ofpost-separation expenses, and he sought prevailing party attorney's fees and costs.[1] Anderson asked that the court amend its judgment to grant her the Zimovia property, and she sought to enjoin Tomal from entering the property, citing a fear of domestic violence. Anderson attached a police report to support the reasonableness of her fear, which Tomal moved to strike as hearsay. Anderson also sought attorney's fees and litigation costs.

         The court denied Tomal's reconsideration motion and Anderson's motions to amend the judgment and for a preliminary injunction. The court admitted the police report as evidence but excluded the hearsay statements it contained, except for one statement by a police officer. The court declined to award Tomal prevailing party attorney's fees, reasoning that the "divorce exception" applied.[2] The court instead awarded Anderson just over $500 in litigation costs in light of her "relative economic disadvantage" and nothing in attorney's fees because she did not provide sufficient factual support for an award.

         Both parties appeal.

         III. DISCUSSION

         This appeal presents several novel issues of domestic partnership law. Anderson appeals the trial court's finding that the parties' domestic partnership terminated in 2012, requiring us to clarify when a domestic partnership terminates. Tomal appeals several of the court's rulings, requiring us to clarify when credit for post-separation property expense payments is appropriate and when the divorce exception to prevailing party attorney's fees applies to domestic partners. Both parties challenge aspects of the court's property distribution, requiring us to clarify both the appropriate legal standards for domestic partnership property distribution and the standards of review we will apply on appeal in such cases. We therefore begin by explaining the standards courts must use to divide property acquired during a domestic partnership, and how we will review that decision-making on appeal, before addressing the parties' arguments.[3]

A. Legal Standards For Domestic Partnership Property Distribution [4]

         Property acquired by domestic partners during a domestic partnership should be distributed according to the partners' intent.[5] But property acquired after the partnership terminates is governed by the ordinary rules of Alaska property law.[6] The first step in distributing domestic partnership property therefore is to assess when the partnership began and ended. Relevant to this appeal, when a domestic partnership ends is a question of fact; the trial court must assess when the partners stopped cohabiting in a marriage-like relationship.[7] We will review the trial court's finding of when a domestic partnership ended for clear error.[8]

         The second step is to classify each item of property held by the parties as partnership property or separate property based on applicable law. A statute or a valid contract between the parties-express or implied-will control the classification in the first instance.[9] But absent a controlling statute or a valid contract between the parties, property must be classified strictly according to the parties' intent.[10] "In some cases, the parties' intent with respect to all or broad classes ofproperty will be easy to infer based on evidence that 'the parties formed a domestic partnership and intended to share in the fruits of their relationship as though married justifying an equal division of their property.' "[11] But not all property acquired during a partnership necessarily is intended to be partnership property: "We emphasize that simply living together is not sufficient to demonstrate intent to share property as though married, and, moreover, that parties who intend to share some property do not presumptively intend to share all property "[12] And parties may not intend to share property equally; for instance, a couple who purchase real property together may intend to share it according to their respective investments.[13] The trial court must be attentive to ensure that it properly determines the parties' intent for each disputed property item. The trial court's underlying findings as to the parties' intent are factual findings reviewed for clear error.[14] The trial court's classification decisions based on statute, contract, or intent are applications of law to fact reviewed de novo.[15]

         The third step is to value the property. The trial court's property valuations are factual findings reviewed for clear error.[16]

         The final step is to distribute the property. Unlike in a divorce, where equitable considerations dictate the final distribution, the trial court must distribute the property strictly according to the property's character as determined by statute, contract, or the parties' intent.[17] Partnership property generally must be distributed equally (or unequally if the parties intended unequal shares), while separate property must be distributed solely to its owner.[18] But the trial court may assign different items of partnership property to the parties and order an equalization payment to ensure that each party receives the correct total share of partnership property.[19] There may be a number of reasonable ways to fairly allocate property in this process; we will review the trial court's allocation decisions, and its decision to order an equalization payment, for abuse of discretion.[20]

         B. The Trial Court's Property Distribution

         Having clarified the standards the trial court should use when distributing property acquired during a domestic partnership, we now evaluate the trial court's property distribution in light of these standards. We conclude that, although most of the distribution is proper, certain aspects are in error.

         1. The trial court did not clearly err by finding that the domestic partnership ended in 2012.

         The first step is to determine when the partnership began and ended. The trial court found that "the parties intended to and engaged in an equal partnership that they expected to continue indefinitely" and that "the domestic partnership did not end until 2012 when... Anderson told ... Tomal that she would no longer sleep under the same roof."[21] The court also found that "[s]ince then, the parties became and remain reluctant co-tenants." This was not clearly erroneous.

         We have emphasized that "simply living together is not sufficient to demonstrate intent to share property as though married."[22] By early 2012 the parties had separate finances and filed separate tax returns; they had not filed a joint tax return at least since 2005.[23] They lived separately, whether in different places or different parts of the same property. Although sometimes living together at the Zimovia property, each cooked their own meals, did their own laundry, and engaged in separate employment. And, although after 20 12 the parties continued to live at, maintain, improve, and hold the debt on the Zimovia property together, [24] this behavior is as consistent with a domestic partnership as with the trial court's conclusion that "[s]ince then, the parties became and remain reluctant co-tenants." We therefore cannot say the court clearly erred in finding the domestic partnership terminated in 2012; we have no definite and firm conviction that a mistake has been made.[25]

         Anderson counters that domestic partnerships are a type of contract and that she and Tomal did not intend for their contract to terminate when their relationship did. But Anderson confuses the legal basis for distributing domestic partnership property with the domestic partnership itself. A domestic partnership in Alaska is a marriage-like relationship between unmarried cohabitants, not a contract. We explained in Tolan v. Kimball that domestic partnership property distribution applies even if "the essential elements of a contract were not present."[26] And, although Anderson and Tomal undoubtedly could have made a contract to control their property distribution over any other intent, [27] Anderson did not claim in the trial court that such a contract existed. It was therefore appropriate for the court to divide Anderson and Tomal's property based on the date it found the partnership terminated, and we affirm the court's selected date as not clearly erroneous.

         2. It was error to classify certain property as partnership property.

         The second step in distributing property acquired during a domestic partnership is to classify the property based on statute, contract, or the parties' intent. Tomal argues that the trial court erred by allocating a portion of his pension to the partnership because there was no evidence that the parties intended to share the pension. Anderson argues that the trial court erred by ...


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