Sandra L. Gunkel v. Daniel G. Gunkel ( 2015 )

FILED
JULY 9, 2015
In the Office of the Clerk of Court
W A State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
In the Matter of the Marriage of ) No. 31918-1-111
)
SANDRA GUNKEL, )
)
AppellantJCross­ )
Respondent, )
) UNPUBLISHED OPINION
and )
)
DANIEL GUNKEL, )
)
RespondentJCross­ )
Appellant. )
LAWRENCE-BERREY, J. Sandra Gunkel and Daniel Gunkel were married 34
years. Ms. Gunkel appeals the trial court's rulings in the dissolution proceeding and
argues that the trial court abused its discretion by dividing their substantial marital
property equally, denying her indefinite monthly maintenance, and denying her an award
of attorney fees. We find no abuse of discretion and affirm.
FACTS
Mr. and Ms. Gunkel were married on July 14, 1979, in Goldendale, Washington.
Neither party brought any significant assets into the marriage with the exception of a
small savings account by Ms. Gunkel. Ms. Gunkel worked as a bank teller and Mr.
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Gunkel as a real estate agent. Ms. Gunkel left her job as a teller in 1981 to care for the
,
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first of the couple's three children.
Sometime after the parties' marriage, Mr. Gunkel's father and brother asked Mr.
I Gunkel to return to work on the family farm. Because real estate sales were decreasing,
Mr. Gunkel returned part time at first but eventually began working for the farm full
I time, receiving a salary from his parents.
I Mr. Gunkel's ancestors settled in the Maryhill area of Klickitat County in the early
1900s. Mr. Gunkel grew up in the area, where his parents ran a small family farm with a
fruit stand. Mr. Gunkel's parents provided the majority of the labor, and the farm grew
slowly. When tillable land became available, Mr. Gunkel's parents would acquire it and
plant fruit trees to increase their fruit production. Eventually, they set up a warehouse
and packing Hnes. In 1993, the family incorporated the farm as Gunkel Orchards Inc.,
listing Mr. Gunkel and his brother as directors. The corporation issued 120 shares of
stock to Mr. Gunkel. Mr. Gunkel's brother also received 120 shares, and his parents
received 80 shares each. At some point, the elder Gunkels also gifted rea) property to
Mr. and Ms. Gunkel together, including a fruit orchard in Maryhill.
Ms. Gunkel also worked with the family on the farm. Each year from May to
October, she performed various tasks, including cleaning fruit, sorting fruit, and cleaning
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restrooms at the fruit stand. She typically worked 10 to 12 hour days. When needed, she
also performed clerical duties for the farm and sent out accounts receivable. Ms. Gunkel
would keep track of the hours she worked and provided the information to Mr. Gunkel's
mother. Mr. Gunkel's mother would then add an appropriate amount to Mr. Gunkel's
check. Ms. Gunkel stopped working in the fruit stand in 1998 when she started a job in
the Goldendale School District as a paraeducator. She continued to provide some clerical
work for the farm until the farm's bookkeeper assumed those tasks.
Mr. Gunkel's parents intended to maintain the farm and its properties in the
Gunkel family. In anticipation of their deaths, Mr. Gunkel's parents created an estate
plan that took a number of years to implement and complete. The ultimate goal of their
estate plan was to keep the family farm together and intact. After the death of their
parents, Mr. Gunkel and his brother received a one-half interest in three pieces of
property: Peach Beach, Maryhill Home Place, and bare land in Kitsap County. Mr.
Gunkel and his brother also inherited their parents' interests in Gunkel Orchards Inc., an
additional 80 shares each.
Part of the estate plan included the "Sugarloaf" land that Mr. Gunkel's parents
acquired in the late 1980s. Mr. Gunkel helped develop this property as an employee of
the farm. He received a paycheck for his work but did not contribute any money to the
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acquisition or development of the land. In December 1997 and again in September 1998~
Mr. Gunkel~s parents gifted portions of the Sugarloaf property to Mr. Gunkel and his
brother as their separate estates. Mr. Gunkel~ his brother~ and his father formed Cherry
Hill LLC in May 1998. In January 1999~ the brothers contributed their portions of the
Sugarloaf property to Cherry Hill LLC. Soon after~ Mr. Gunkel's father gifted the
remaining portion of the Sugarloaf property to the brothers~ who then conveyed it to
Cherry Hill LLC. Accordingly, Cherry Hill LLC owned all of the Sugarloafproperty~ as
well as additional property bought with a cash contribution from Mr. Gunkel's father.
Cherry Hill LLC strictly holds land that is rented to a third party. Mr. Gunkel did not
contribute any separate money to Cherry Hill LLC.
When Mr. Gunkel and Ms. Gunkel first married~ they lived a modest lifestyle.
They delayed purchases~ went without health insurance~ and drove cars until they were
inoperable~ all in an effort to reach their goal of building a successful~ sustainable
business and to achieve financial security. Their financial position started to improve in
1991 when Mr. Gunkel was elected to the Klickitat County Public Utility District (PUD)
board and began receiving income and health insurance from his position. As time went
on, Ms. Gunkel was able to spend more on clothes, go to events, purchase gifts~ and save
money.
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In 1999, the parties purchased real property at Dry Creek as a second home. They
were able to purchase this home without having to take out a loan. The property consists
of over 120 acres and came with a home that the Gunkels remodeled. The parties
continued to live in their first home in Goldendale but visited Dry Creek regularly.
The parties separated on March 16,2010, shortly before Ms. Gunkel filed for
dissolution. At the time of trial, their estate was worth over $2 million and the parties
had no debt. Ms. Gunkel was 54 and still employed as a paraeducator in the school
district. She was earning a gross monthly income of nearly $1,500 from the school
district and was receiving $1,578 from Mr. Gunkel as temporary maintenance. Her
claimed monthly expenses totaled $2,652. She suffers from high blood pressure and
anxiety.
Mr. Gunkel was earning a gross monthly income of approximately $8,700 from a
combination of farm wages, PUD wages, and interest and dividend income. Mr. Gunkel
moved from the Goldendale home to the Dry Creek home, in part because he needed to
live in the district where the house was located to maintain his position with the PUD.
The parties' dissolution trial spanned four days. The parties argued over the
characterization and value of the land. Both parties asked for the Dry Creek home. Ms.
Gunkel requested lifetime monthly maintenance of$3,500 per month.
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The court found that the three gifted properties and 80 shares of Gunkel Orchards
Inc. were Mr. Gunkel's separate property, and valued those assets at $846,025. The court
found that Mr. Gunkel's parents clearly and meticulously laid the groundwork to
maintain a family estate and that Mr. Gunkel established that these assets were his
separate property.
The court found that Mr. Gunkel's 50 percent interest in Cherry Hill LLC valued
at $270,495, his 120 shares of Gunkel Orchards Inc. valued at $600,000, and a number of
other parcels of land and business assets were community property. The majority of the
land and all the business assets were co-owned equally with Mr. Gunkel's brother,
leaving the community a 50 percent share of those assets. The court found that both Mr.
Gunkel and Ms. Gunkel contributed equally to the improvement and growth of the
business.
In dividing the property, the trial court awarded all of the land, the business assets,
and Dry Creek to Mr. Gunkel. The trial court awarded the majority of the couple's bank
accounts, retirement accounts, and personal property to Ms. Gunkel. The trial court
ordered that the Goldendale residence be sold, as neither party wanted the home. The
court divided the value of the home equally.
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Mr. Gunkel's award of community property totaled $1,915,629, whereas Ms.
Gunkel's award of community property totaled $378,885. To equalize the community
property award, the court ordered Mr. Gunkel to make an equalizing payment to Ms.
Gunkel in the amount of $768,372. The trial court awarded Dry Creek to Mr. Gunkel in
part so he could mortgage the property to make the equalizing payment to Ms. Gunkel.
The trial court further found that the marriage was long term. Its primary concern
was to leave the parties in roughly the same financial condition and to make a just and
equitable distribution of property after considering the relevant factors. In awarding the
land to Mr. Gunkel, the trial court recognized Mr. Gunkel's family's history with the
property and his efforts in growing the estate. The court also reasoned that Mr. Gunkel
should receive the property because he had the attributes to make the business grow. The
court found that Mr. Gunkel was an articulate, ambitious, and relatively young and
healthy person. The court recognized that Mr. Gunkel and his brother could continue to
grow the business. "His history for the last three decades has been one of steady
improvement of an ever-increasing upward trajectory in terms of his various enterprises,
and I expect that will continue." Report of Proceedings (Feb. 5,2013) (RP) at 1093.
The court found that Ms. Gunkel did not have the same attributes and options as
Mr. Gunkel due to her health problems, limited career prospects, and a lesser degree of
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ambition. "She is basically where she's going to be now .... So to the extent that the
court leaves her-whatever I leave her with today is what she will have for the rest of her
life." RP at 1094. The court found that if Ms. Gunkel would be prudent with her cash
award, she would be able to live "very, very comfortably the rest of her life." RP at
1093.
The trial court recognized that the division of assets left Mr. Gunkel primarily with
the business property and Ms. Gunkel with cash.
[Mr. Gunkel] ends up being land and business rich in a sense, and in
this dissolution action comes out with very little cash. [Ms. Gunkel] gets
none of the real property, including the Dry Creek residence, which she
wanted. However, my calculations suggest that after the judgment is paid
she will be a millionaire. She'll have $1,046,649 in the bank .... That
gives her the power and control over her life that she's been lacking and
desires, and allows her to have an extraordinarily rich set of options if she
chooses to use that money wisely.
RP at 1098. The court found that the division left both parties in very good condition
financially. The court ordered the first half of the equalizing payment to be made within
six months of the dissolution decree and the remainder to be paid in installments over the
next few years.
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The court ordered Mr. Gunkel to pay $1,578.50 in maintenance until half of the
equalizing payment was tendered. I The court found that once Ms. Gunkel received half
of the payment, she would have a significant bank account and could "begin to process
her way out of this." RP at 1099. The court also denied her request for an award of
attorney fees, finding that each party had sufficient assets to pay their own attorney fees.
Ms. Gunkel appeals the trial court's distribution of property. She contends that the
trial court abused its discretion by not awarding maintenance in the amount of$3,500 per
month indefinitely. She also contends that the trial court's property division was not just
and equitable. In a conditional cross appeal, Mr. Gunkel contends that if this court finds
the property distribution unfair, then he requests review of whether the trial court
improperly characterized Cherry Hill LLC as community property.
ANALYSIS
A. Whether the trial court abused its discretion infailing to award Ms. Gunkel a
larger portion ofthe parties' community property, specifically the Dry Creek
home
We review a trial court's property division and award of maintenance after
dissolution for a manifest abuse of discretion. In re Marriage of Washburn, 101 Wn.2d
IThe record establishes that Mr. Gunkel satisfied the $768,372 judgment on
January 22, 2014.
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168, 179,677 P.2d 152 (1984). A trial court is given broad discretion in dividing
property because it is in the best position to determine what is fair, just, and equitable. In
re Marriage of Wallace, 111 Wn. App. 697, 707, 45 P.3d 1131 (2002). "A court abuses
its discretion when its decision is manifestly unreasonable or based on untenable grounds
or for untenable reasons." Id. A decision will be affirmed on appeal unless the spouse
challenging the property division can show that no reasonable judge would have reached
the same decision. In re Marriage ofLan dry, 103 Wn.2d 807, 809-10, 699 P.2d 214(1985).
"[T]rial court decisions in a dissolution action will seldom be changed upon
appeal. Such decisions are difficult at best. Appellate courts should not encourage
appeals by tinkering with them. The emotional and financial interests affected by such
decisions are best served by finality." Id. at 809.
We first address Ms. Gunkel's contention that the trial court abused its discretion
by not awarding her a larger portion of the community property. Specifically, she
requests the Dry Creek home. She contends that the division of property was not just and
equitable because Mr. Gunkel received income-producing property as well as his separate
property, whereas her award does not provide a source of income. Instead, she maintains
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that she will be forced to deplete her funds and cannot improve her situation like her
husband can.
The trial court's distribution of property in a dissolution action is guided by
statute, which requires it to consider multiple factors in reaching an equitable distribution
of property. RCW 26.09.080. These factors include (1) the nature and extent of the
community property, (2) the nature and extent of the separate property, (3) the duration of
the marriage, and (4) the economic circumstances of each spouse at the time the division
of the property is to become effective. Id."An equitable division of property does not require mathematical precision, but
rather fairness, based upon a consideration of all the circumstances of the marriage." In
re Marriage ofCrosetto, 82 Wn. App. 545,556,918 P.2d 954 (1996).
Ms. Gunkel fails to show that the trial court's award was an abuse of discretion.
The trial court considered the factors an~ appropriately divided the property. The trial
court considered the Gunkels' extensive community property, held mostly in the couple's
business operation. The court found that Ms. Gunkel contributed equally to the farm and
her participation was the quintessential rationale for community property laws in
Washington. Additionally, the court considered the separate property given to Mr.
Gunkel by his parents. The court stated, "[T]he court is mindful that while these
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inheritances and gifts were coming the husband's way, he was at times not just
unrelentingly working on the community property, but he was also working on the
separate property. And that is factored into my ultimate assessment of the equities of the
dissolution distribution." RP at 1091-92. The court noted that the amount that it was
ordering Mr. Gunkel to pay Ms. Gunkel was somewhat more than Mr. Gunkel wanted to
pay and somewhat less than Ms. Gunkel wanted.
As for the duration of the marriage and the economic circumstances of the parties,
the court recognized that the couple's effort to build their fortune was a community effort
over three decades of marriage. "By very hard continuous work and intelligent decisions
and a strategy of delayed gratification, this extraordinary couple built up a business estate
worth in excess of $2 million." RP at 1085-86.
The court awarded the property to Mr. Gunkel because of its connection to his
family, especially his brother, and Mr. Gunkel's ability to grow the business. The court
compensated for the large property award by ordering Mr. Gunkel to make an equalizing
payment to Ms. Gunkel.
Taking the trial court's findings into consideration, we do not find the property
distribution unfair or inequitable. Ms. Gunkel received approximately $1.25 million of
the couple's $2,489 million estate. While her portion of the property division is mostly
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cash and not investment property like Mr. Gunkel's portion, this does not make the
division unfair. Ms. Gunkel's award allows her to invest her large cash award for an
investment return, while still providing for her basic needs. Ms. Gunkel's desired income
was $3,120 per month. According to evidence presented at trial, a conservative five
percent return from just the equalizing judgment of $700,000 plus her salary as a
paraeducator would produce a monthly income of $4,409. In this calculation, the
difference between desired income and actual income would leave Ms. Gunkel with a
surplus of$1,289. Ms. Gunkel's surplus allows her to grow her investment or afford a
better lifestyle. Additionally, this calculation does not account for the approximately
$278,000 in bank accounts or the retirement accounts that Ms. Gunkel received as part of
the property distribution that she will have at her disposal.
In contrast, Mr. Gunkel's award consisted of primarily land and business assets.
Mr. Gunkel received relatively little cash but owed a large payment to Ms. Gunkel. The
court used its discretion to award the Dry Creek home to Mr. Gunkel to provide collateral
for the payment. While Mr. Gunkel's income of $8,700 was higher than Ms. Gunkel's
income, he was forced to mortgage the Dry Creek property to pay Ms. Gunkel's
equalizing lien. He estimated his monthly household expenses with the mortgage to be
about $5,470 and deductions from his income to be $2,000, giving him a monthly surplus
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of about $1,200. This amount is slightly less than Ms. Gunkel's surplus. While Mr.
Gunkel will be able to grow his business and potentially receive a higher income, he will
also have to take risks and put in the necessary work to accomplish this task. The trial
court's property division was well within its discretion. We do not find the division to be
unjust or inequitable.
B. Whether the trial court abused its discretion by not awarding indefinite monthly
maintenance 0/$3,500 to Ms. Gunkel
Ms. Gunkel contends that the trial court abused its discretion by not awarding her
lifetime maintenance. She maintains that maintenance was needed to place the parties in
equal financial positions. Underlying this contention is Ms. Gunkel's belief that the
property distribution was not equitable because it awarded all of the income-producing
assets to Mr. Gunkel, which gives him the ability to create wealth.
In a dissolution proceeding, the court may grant maintenance to either spouse.
RCW 26.09.090 provides:
The maintenance order shall be in such amounts and for such periods of
time as the court deems just, without regard to misconduct, after
considering all relevant factors including but not limited to:
(a) The financial resources of the party seeking maintenance,
including separate or community property apportioned to him or her, and
his or her ability to meet his or her needs independently, including the
extent to which a provision for support of a child living with the party
includes a sum for that party;
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(b) The time necessary to acquire sufficient education or training to
enable the party seeking maintenance to find employment appropriate to his
or her skill, interests, style of life, and other attendant circumstances;
(c) The standard of living established during the marriage or
domestic partnership;
(d) The duration of the marriage or domestic partnership;
(e) The age, physical and emotional condition, and financial
obligations of the spouse or domestic partner seeking maintenance; and
(f) The ability of the spouse or domestic partner from whom
maintenance is sought to meet his or her needs and financial obligations
while meeting those of the spouse or domestic partner seeking
maintenance.
A trial court does not have to find all of the factors; nor is this list exclusive when
deciding on an award of maintenance. Washburn, 101 Wn.2d at 179. "The purpose of
spousal maintenance is to support a spouse, typically the wife, until she is able to earn her
own living or otherwise becomes self-supporting." In re Marriage ofLuckey, 73 Wn.
App. 201, 209, 868 P.2d 189 (1994).
Lifetime maintenance is generally disfavored. Cleaver v. Cleaver, 10 Wn. App.
14,20,516 P.2d 508 (1973). Maintenance is not a matter of right, and courts may not
grant a perpetual lien on the future earnings of a maintenance obligor. In re Marriage of
Morgan, 59 Wn.2d 639,642,369 P.2d 516 (1962). However, "[w]here the assets of the
parties are insufficient to permit compensation to be effected entirely through property
division, a supplemental award of maintenance is appropriate." Washburn, 101 Wn.2d at
178.
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The trial court did not abuse its discretion when it denied Ms. Gunkel's request for
lifetime maintenance in the amount of$3,500. The trial court found that maintenance
was necessary only until Ms. Gunkel received one"half of the equalizing payment. The
court found that once one"half of the equalizing payment was received by Ms. Gunkel,
she would be in a secure financial position. We find no error with the trial court's
decision.
The trial court considered the above factors in its oral findings. The trial court
found that the award of over one million dollars would allow Ms. Gunkel to support
herself independently. The court acknowledged that Ms. Gunkel would likely not attend
further schooling or better her position, but found that the amount of the award would
allow her to live very comfortably, especially if she was responsible with her award. The
court also recognized that the marriage was lengthy and that Ms. Gunkel suffered from
some health issues. Still, the court found that the amount of the award placed both parties
in fairly equal positions.
Ms. Gunkel contends that her situation is similar to In re Marriage ofMorrow, 53
Wn. App. 579, 587, 770 P.2d 197 (1989), where the parties were married for 23 years,
during which time Ms. Morrow sacrificed her earning potential by becoming a
homemaker. The appeals court determined that maintenance was appropriate to
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compensate for the inequitable distribution of property due to Mr. Morrow's actions. Id.
at 588-89. The court found that Mr. Morrow transferred his community assets to third
parties before the dissolution, which put Mr. Morrow in a very advantageous position.
Id. at 586. The court also reviewed the factors ofRCW 26.09.090 and found that the
maintenance amount and length were warranted because Ms. Morrow was not likely to
achieve the financial independence enjoyed by Mr. Morrow or retain the high standard of
living, she sacrificed her earning potential by becoming a homemaker during the 23-year
marriage, and her physical disability warranted a higher amount than would ordinarily be
appropriate. Id. at 587-88.
Morrow is distinguishable from Ms. Gunkel's situation because the property
distribution here is just and equitable. There is no evidence that Mr. Gunkel concealed
property from the trial court. Instead, Ms. Gunkel received roughly one-half of the
couple's community property from a two million dollar estate. The award compensates
Ms. Gunkel for the time and effort she contributed to the marriage. As determined above,
the trial court's division provides Ms. Gunkel with the means to live a comfortable life.
A maintenance award is not needed to compensate for an inequitable property
distribution or to reward Ms. Gunkel for her efforts in the marriage. Ms. Gunkel received
one-half of the parties' accumulated wealth, which left her with a large amount of cash.
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If managed correctly, this amount is sufficient to allow her to live a very comfortable life
compared to her standard of living during her marriage. The trial court did not abuse its
discretion by failing to award indefinite maintenance in the amount of$3,500 to Ms.
Gunkel.
Given our conclusion that the trial court did not abuse its discretion in its division
of property and temporary award of maintenance, we need not address Mr. Gunkel's
conditional cross appeal, which concerns the characterization of his 50 percent interest in
Cherry Hill LLC as community property.
C. Whether the trial court abused its discretion by denying Ms. Gunkel's request for
an award ofattorney fees
We review a trial court's decision to deny or award attorney fees in a dissolution
action for an abuse of discretion. In re Marriage ofStenshoel, 72 Wn. App. 800, 814,
866 P.2d 635 (1993). "In making an award, the trial court 'must balance the needs of the
spouse requesting [attorney fees] with the ability of the other spouse to pay.'" In re
Marriage ofTower, 55 Wn. App. 697, 705,863 P.2d 863 (1989) (quoting Kruger v.
Kruger, 37 Wn. App. 329, 333, 679 P.2d 961 (1984)).
The trial court did not abuse its discretion in declining to award attorney fees. The
court considered the request and found that both parties had sufficient funds to pay their
own attorney fees. Based on the amount of property distributed to each party and the
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ability of each party to live comfortably after the division, we find no abuse of discretion
by the trial court. For the same reason, we decline Ms. Gunkel's request for attorney fees
on appeal.
Affirm.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
Lawrence-Berrey, J.
WE CONCUR:
Fearing,
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