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Downs v. Downs

Supreme Court of Alaska

May 3, 2019

ERROL P. DOWNS, Appellant,
v.
DEBORAH DOWNS, Appellee.

          Appeal from the Superior Court of the State of Alaska, No. 1PE-13-00059 CI, First Judicial District, Petersburg, William B. Carey, Judge.

          Walter R. Arden, Anchorage, for Appellant.

          Rhonda F. Butterfield, Wyatt & Butterfield, LLC, Anchorage, for Appellee.

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

          OPINION

          CARNEY, Justice.

         I. INTRODUCTION

         A husband appeals the superior court's unequal property division in a divorce proceeding that gave the wife the majority of the marital estate. He argues that the superior court abused its discretion when dividing the property and that the property division was therefore inequitable. Because the property division was neither clearly unjust nor based on clearly erroneous factual findings, we affirm the superior court's decision.

          II. FACTS AND PROCEEDINGS

         Errol Downs and Deborah Downs were married in 1985. Errol suffered a heart attack in approximately 1988, had heart surgery in 1989, and did not return to work. Errol began collecting Social Security Disability Insurance in 1994. That same year, the parties moved to Alaska following Deborah's retirement from her job with the State of Oregon, eventually buying a house in Petersburg. She then took a job with the State of Alaska. Deborah worked for the State until her retirement in 2009.

         The parties separated after Deborah sought a domestic violence protective order against Errol in January 2013. Deborah alleged that she feared for her safety because Errol was behaving strangely and threatening to hurt her. Around the same time that Deborah filed the domestic violence protective order, Errol moved out of the marital home and into a motel room. He lived at the motel until August when he was moved to the Petersburg Medical Center. Doctors diagnosed him with dementia, as well as depression, malnutrition, alcoholism, and other conditions.

         Errol filed for divorce in October 2013. Approximately six months later Errol's attorney petitioned the probate court to appoint a guardian for Errol. The petition was granted, and a public guardian was appointed.[1] The following April Errol's leg was amputated above the knee, leaving him unable to walk. As a result of his significant healthcare needs, he moved to an assisted living facility in Anchorage.

         In February 2016 Deborah filed a motion to dismiss the divorce complaint on the basis that Errol was not competent to get a divorce. At trial the superior court determined that Errol was competent, denied Deborah's motion to dismiss, and then proceeded to divide the marital estate.

         Errol requested approximately 50% of the marital assets. His guardian testified regarding his financial needs and the impact that the property division could have on his eligibility for services, including Medicaid.[2] The guardian testified that he had an irrevocable trust that ensured his continuing eligibility for Medicaid, [3] a separate burial account, [4] a Permanent Fund Dividend account, and a checking account that had a balance of less than $2, 000 (as required to maintain Medicaid eligibility).[5] At the time of trial Errol resided in a long-term healthcare facility. The cost of the facility was covered in large part by long-term care insurance he received as a beneficiary of Deborah's insurance plan.[6] The remainder of the monthly cost was covered by Medicaid.

         Errol's guardian testified that if Errol received his proposed portion of the marital assets, they could be placed in his trust and then used to buy a home for him. She highlighted the importance of maintaining Errol's Medicaid eligibility but did not claim that he could not receive the benefit of his proposed share of the marital assets.

         Deborah argued that all of the marital assets except 95% of her monthly Oregon state retirement benefit should be awarded to her. She argued that her Oregon state retirement benefit could pay for Errol's monthly health insurance premiums.[7]Deborah contended that this was equitable because all of Errol's needs were met by Medicaid and his long-term health insurance and because Errol had not identified any additional needs. Further, Deborah noted that at Errol's death assets in his trust would revert to the State of Alaska.[8]

         The superior court granted the divorce. In its division of the marital assets, Errol received $31, 680, which was 40% of the proceeds from the sale of the parties' boat and hand-troll fishing permit. He was also awarded 95% of Deborah's monthly Oregon state retirement benefit, as well as some household items. The court awarded Deborah the rest of the marital estate, including a car, the marital home (which was free of any mortgage and valued at $245, 000), and her other retirement accounts.

         To justify its division the court discussed the relevant statutory factors from AS 25.24.160(a)(4).[9] It found that Deborah was retired, 67 years old, and needed the marital assets to live comfortably for the rest of her life. It also found that, because Errol needed to maintain Medicaid eligibility, his assets were in an irrevocable trust and that any assets in that trust would revert to the State of Alaska upon his death. It specifically found that Errol was unlikely to ever live independently, that all of his needs were met by Medicaid and long-term health insurance, and that he had been unrealistic about his potential future living situation.

         Errol now appeals the superior court's unequal property division.

         III. STANDARD OF REVIEW

         When dividing marital property in a divorce proceeding, the trial court must complete three steps: "(1) determin[e] what property is available for distribution, (2) find[] the value of the property, and (3) divid[e] the property equitably."[10]

          Errol only appeals the third step: the superior court's division of property, which we review for abuse of discretion[11] and will reverse only if it is "clearly unjust" or "based on a clearly erroneous factual finding or mistake of law."[12] We review factual findings for clear error, reversing "if, upon review of the entire record, we are ...


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