Steven Linvel Midkiff v. Shelley Golard Midkiff ( 2014 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
In the Matter of the Marriage of ] No. 69031-1-1
SHELLEY GOLARD MIDKIFF, ] DIVISION ONE
Respondent, ] UNPUBLISHED OPINION
and ]
a- >-,
STEVEN LINVEL MIDKIFF, ;
Appellant. i FILED: January 21, 2014
e Ss
Appelwick, J. — Steven appeals the trial court's division of property wKen"c
dissolving his marriage to Shelley. Steven challenges the manner in which the court
divided the equity in the parties' real estate assets. However, the record fails to
demonstrate that the trial court abused its broad discretion. We affirm.
FACTS
Steven Midkiff and Shelley Midkiff married in June 2008. Less than three years
later, in March 2011, the parties separated and Shelley filed a petition for dissolution.1
At the time of the marriage, each party owned a residence. Shortly after they
married, they decided to sell one residence in order to buy a larger one and to retain the
other premarital home as an investment. Based on the parties' assessment of the
1We refer to the parties by their first names to avoid confusion.
No. 69031-1-1/2
investment potential of the two properties, they decided to sell Shelley's Seattle house
and keep Steven's Bothell house. Shelley used $195,000 out of the $201,000 she
received in proceeds toward the $650,000 purchase price of a new home.
During the marriage, Shelley was employed as a web specialist at the University
of Washington. Steven was self-employed as an audio engineer and ran his own
business. The house they purchased together had a large home office, which Steven
used to operate his business, and a three car garage, which he also used as a
workshop and storage space for equipment used in his business.
While married, the parties kept their finances separate and divided living
expenses. Steven's responsibilities included the mortgage and utilities, and Shelley
paid for other items, such as food, medical insurance, home maintenance, telephone,
and cable. Steven rented his Bothell home to tenants and used the rental income to
pay the mortgage and maintenance on that property.
After the couple separated, Steven remained in the marital home and continued
to pay the mortgage. The parties agreed that the house should be sold, as neither party
could afford to keep it. According to the evidence, at the time of the February 2012 trial,
the home had a fair market value of $560,000, and the anticipated proceeds from the
sale, after deducting the mortgage and paying all associated costs, were approximately
$66,000.
The parties apparently agreed as to the characterization and allocation of all
assets and liabilities. Steven conceded that Shelley should receive all of the proceeds
from the sale of the parties' home. The only point of disagreement was whether Shelley
should receive additional funds to compensate her for her investment of separate funds
No. 69031-1-1/3
in the family home. Shelley's position was that even if she were awarded 100 percent
of the anticipated proceeds, she would still unfairly bear the burden of the parties' loss
on their joint investment.
Steven testified that in 2006 or 2007, the value of his Bothell home was "in the
high $300,000's" and that it was appraised in 2010 for $346,000. He estimated that the
value at the time of trial was "about" $340,000. The home had a mortgage of
approximately $95,000. Steven provided no specific evidence as to the value of the
home in 2008 when the parties married.
The trial court considered the short duration of the marriage and the fact that
each party entered the marriage with one significant premarital property asset. The trial
court determined that a fair and equitable distribution of the property required equal
division of the parties' net equity in their two remaining properties. The court observed
that distributing only the equity in the marital home would leave the parties in disparate
positions. In that scenario, Steven would retain approximately $240,000 in equity on his
premarital home. He would also have had use of the marital home for his business and
personal purposes and would have "benefitted unduly from the parties' joint decision to
sell Wife's home and keep Husband's home for the benefit of the community."
No. 69031-1-1/4
Accordingly, the court awarded to Shelley $66,300, the anticipated proceeds
from the sale of the home. The court also ordered Steven to make a transfer payment
of $81,200, secured by a lien on his separate real property. Thus, based on total net
equity of approximately $300,000 in the two properties, the court awarded Shelley a
total of $147,500.
DISCUSSION
Steven challenges the trial court's division of property. In a dissolution action,
the trial court must order a "just and equitable" distribution of the parties' assets and
liabilities, whether community or separate. RCW 26.09.080. All property is before the
court for distribution. Farmer v. Farmer. 172 Wn.2d 616, 625, 259 P.3d 256 (2011). In
reaching a just and equitable property division, the trial court must consider: (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 property division is to become effective. RCW 26.09.080; In re
Marriage of Rockwell. 141 Wn. App. 235, 242-43, 170 P.3d 572 (2007). These factors
are not exclusive. RCW 26.09.080.
We will seldom modify a trial court's division of property and assets on appeal,
and the party who challenges such a decision bears a heavy burden to show a manifest
abuse of discretion on the part of the trial court. In re Marriage of Muhammad, 153
Wn.2d 795, 808, 108 P.3d 779 (2005) (Sanders, J., dissenting). A trial court abuses its
discretion if its decision is outside the range of acceptable choices or based on
untenable grounds or untenable reasons. In re Marriage of Littlefield, 133 Wn.2d 39,
47, 940 P.2d 1362(1997).
No. 69031-1-1/5
A just and equitable division "does not require mathematical precision, but rather
fairness, based upon a consideration of all the circumstances of the marriage, both past
and present, and an evaluation of the future needs of parties." In re Marriage of
Crosetto, 82 Wn. App. 545, 556, 918 P.2d 954 (1996). A just and equitable distribution
of property does not necessarily require an equal distribution and under appropriate
circumstances, a court may award the separate property of one party to the other. In re
Marriage of DewBerrv. 115 Wn. App. 351, 366, 62 P.3d 525 (2003); In re Marriage of
White, 105 Wn. App. 545, 549, 20 P.3d 481 (2001).
Steven contends that trial court's decision to order a transfer payment, in addition
to the equity in the marital home, renders the property division inequitable. However,
we do not review the trial court's distribution of specific assets in a vacuum. It is the
overall division of property that must be just and equitable. And, here, the record before
this court does not allow us to review the division of property in its entirety. An expert
assessed the value of the parties' joint residence. But, no experts evaluated other
significant assets, such as Shelley's pension benefit and Steven's business.2 Although
the parties apparently submitted briefing at trial that presumably included proposed
values for all assets, these documents do not appear in the record on appeal. In the
absence of reliable evidence in the record as to the value of all the parties' assets, we
are unable to evaluate Steven's claim that the trial court's division of real property
2 With respect to Shelley's pension, there was evidence only of Shelley's
estimated monthly benefit amount if she retired in 2019, not its present value. With
respect to Steven's business, Steven estimated in discovery responses that the value
was $250,000 based on equipment owned by the business. Apparently, no appraisal
was made.
No. 69031-1-1/6
rendered the overall distribution unjust and inequitable. As a result, Steven cannot
carry his burden to show the trial court abused its discretion.
Except, as to this one question, the parties appear to assume that the allocation
of other assets and liabilities places the parties in the relative financial positions they
were in prior to marriage. Steven argues that Shelley is adequately compensated for
her $195,000 down payment by receiving the $66,300 net proceeds from the sale of the
house. However, this argument shifts all the loss from the purchase and sale of the
community residence to her separate assets. His separate real estate equity would be
untouched. This does not restore the parties to their respective premarriage positions.
The court did not abuse its discretion in determining that a compensating transfer
payment was appropriate nor in making that payment a lien on Steven's separate
property. The trial court's disposition of property reflects its intent to ensure that the
parties equitably shared in the loss on their joint investment.
With respect to the premarital conditions, the evidence clearly established that
Shelley realized more than $200,000 in net equity when she sold her Seattle home in
2008. Adding the equity lost to the costs of sale is a proper consideration, and
increases that figure by 9 to 10 percent of the sale price. Although Steven's testimony
suggested that he may have had more equity in his premarital home at that time, he
presented no concrete evidence to establish the amount. The evidence of value of his
equity ranged from $240,000 to nearly $300,000. Based on the limited evidence before
the court, the nearly 50-50 division of the surviving equity interests is within the scope of
the evidence presented and furthers the court's stated purpose of reinstating the
premarital financial circumstances.
No. 69031-1-1/7
Based on the record before this court, the trial court's order reflects its
consideration of all the parties' property, the duration of the marriage, and the economic
circumstances. We find no abuse of discretion.
Citing RCW 26.09.140 and RAP 18.1, Shelley requests attorney fees on appeal.
Having considered the merits of Steven's appeal and the financial resources of both
parties, we exercise our discretion and decline to award attorney fees.
Affirmed.
WE CONCUR:
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