Patrick R. Moran v. Whitney D. Moran , 2022 ME 43 ( 2022 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2022 ME 43Docket: Wal-21-309
Argued: April 6, 2022
Decided: August 9, 2022
Panel: STANFILL, C.J., and MEAD, JABAR, HORTON, and CONNORS, JJ.*
PATRICK R. MORAN
v.
WHITNEY D. MORAN
CONNORS, J.
[¶1] Whitney D. Moran appeals from a divorce judgment entered by the
District Court (Belfast, Walker, J.) on Patrick R. Moran’s complaint. Whitney
contends that the trial court erred or abused its discretion in its classification
of the parties’ retirement accounts and its denial of her request for attorney
fees.1 We vacate the judgment in part and remand for further proceedings.
* Although Justice Humphrey participated in the appeal, he retired before this opinion was
certified.
1 Whitney also argues that the trial court erred by assigning a value of $8,500 to the parties’ real
property. Because the trial court’s finding is supported by competent evidence in the record, we
discern no error. See Berntsen v. Berntsen, 2017 ME 111, ¶¶ 13-14, 163 A.3d 820; Theberge v.
Theberge, 2010 ME 132, ¶¶ 17-18, 9 A.3d 809; Peters v. Peters, 1997 ME 134, ¶¶ 13-14,
697 A.2d 1254.
2
I. BACKGROUND
[¶2] The record supports the following facts. Patrick and Whitney were
married in August 2017, and they have one child who was born in January 2019.
In June 2019, Patrick filed a complaint for divorce. Whitney answered and
counterclaimed.
[¶3] Two years later, the court held a two-day trial. The parties testified
about their decision in February 2019 to begin living apart. They both testified
that Patrick had emotionally withdrawn from the marriage during Whitney’s
pregnancy and that, approximately two weeks after their child was born,
Whitney went to California with the child to receive support from her family.
Before Whitney and the child left, Patrick and Whitney signed a short statement
entitled “Informal Marriage Agreement” in which they stated that they were
neither legally separating nor terminating their marriage.
[¶4] The parties also testified about their decision in June 2019 to legally
end their marriage. Whitney testified that, after several months “without
answers,” she filed a petition for legal separation on May 31, 2019, in California.
A few days later, Whitney returned to Maine with the parties’ child for a visit.
During the visit, after learning that Patrick had been having an affair, Whitney
3
had Patrick served with a copy of the petition. Patrick then filed for divorce in
Maine.
[¶5] The parties also testified about their income and retirement
accounts, and the court admitted numerous financial documents. Patrick
testified that he has worked for Versant Power—formerly Emera Maine—since
2014. In 2020, he earned $103,176.64. Patrick further testified that he has
three retirement accounts: (1) a Vanguard brokerage account, (2) a Vanguard
Roth IRA, and (3) a Versant Power 401(k) account. Because the parties had a
“short marriage,” Patrick suggested that the court determine the marital
portion of his retirement accounts using the values of the accounts on the “date
of separation” rather than at the time of the hearing. He offered several exhibits
to establish the balances of his retirement accounts on various “milestone”
dates, including the date of the marriage, the “date of separation,” the date of
the judicial settlement conference, and the date of the divorce hearing. Some of
the exhibits used a “date of separation” in February 2019, while other exhibits
used a “date of separation” in June 2019. At the time of the trial, Patrick’s
retirement accounts had a combined value of $357,063.50.
[¶6] Whitney testified that she currently works as a special education
teacher in California and that she had worked as a special education teacher
4
when she lived in Maine. In 2020, she earned approximately $28,000. Whitney
further testified that she has four retirement accounts: a MainePERS account, a
CalSTRS account, a Vanguard brokerage account, and a Vanguard Roth IRA.
Regarding her MainePERS account, Whitney testified that the account was
valued at $4,739.25 at the time of the marriage and $10,689.76 as of April 2021.
Regarding her CalSTRS account, Whitney testified that the account was valued
at $3,018.66 as of January 2021. Two weeks before trial, Whitney submitted an
updated financial statement in which she indicated that her Vanguard
brokerage account and Vanguard Roth IRA had a combined value of $15,773.67
and that the accounts had both marital and nonmarital components. At trial,
Whitney testified that her Vanguard accounts had a combined balance of
$3,817.41 at the time of the marriage and that they had a current balance of
$16,031.48. To support her testimony, Whitney offered account statements,
which the court admitted. According to this evidence, Whitney’s retirement
accounts had a total value of $29,739.90.
5
[¶7] Whitney requested that Patrick pay $12,987.20 toward her attorney
fees and submitted an affidavit showing that she had incurred that amount,
excluding fees incurred for the two days of trial.2
[¶8] On August 4, 2021, the court entered a judgment of divorce and
denied Whitney’s request for attorney fees.3 Although the court did not
expressly find that the parties had legally separated, the court relied on the
“date of separation”4 to determine the marital and nonmarital components of
Patrick’s retirement accounts. For Patrick’s 401(k) account, the court found
that it was valued at $32,847.21 on the date of the marriage and $78,407.24 on
the “date of separation.” The court determined that the increase in value from
the date of the marriage to the “date of separation” was marital property and
divided it evenly between the parties. For Patrick’s Vanguard accounts, the
2 Whitney’s attorney fee affidavit also did not include—and she did not seek—attorney fees that
she had incurred in California.
3 A table showing a distribution of the parties’ retirement accounts and real property appears in
the trial court file and was included in the appendix. See, e.g., Carter v. Carter, 2006 ME 68, ¶ 8 & n.4,
900 A.2d 200. The origin of the table is not apparent from either the judgment or the table itself, but
the parties agreed at oral argument that the trial court created the table and that the table forms part
of the judgment. The best practice for a trial court including an attachment with a judgment is to
expressly incorporate the attachment into the judgment by reference.
4 The trial court did not identify the date on which it found that the parties had separated. Based
on the record, it appears that the trial court used a “date of separation” of June 2019 for Patrick’s
401(k) account but used a “date of separation” of February 2019 for Patrick’s Vanguard accounts.
The trial court did not use any “date of separation” to determine the character or values of Whitney’s
accounts.
6
court found that they had a combined value of $88,570.86 on the date of the
marriage and $137,845.00 on the “date of separation.” The court further found
that Patrick had made a “nonmarital gift” of $25,000 during the marriage that
had contributed to the increase in the Vanguard accounts’ combined value.5
After setting aside $113,570.86 to Patrick as his nonmarital property, the court
found that the remaining $24,274.14 was marital property and divided it
evenly between the parties.
[¶9] Regarding Whitney’s retirement accounts, the court found that her
MainePERS account was entirely marital and that her CalSTRS account was
entirely nonmarital. The court awarded both accounts to Whitney. The court
further awarded to Whitney her Vanguard brokerage account and Vanguard
Roth IRA, which the court found were entirely marital property and were
valued at $15,773.67 and $12,214.07, respectively.
[¶10] Whitney timely filed a motion for further findings of fact and
conclusions of law with an incorporated motion to alter or amend the judgment.
See M.R. Civ. P. 52(b), 59(e). She also renewed her request for attorney fees,
5At trial, Whitney argued that Patrick’s $25,000 contribution was marital property because the
bank account from which he made the transfer contained comingled marital and nonmarital funds.
She does not challenge the court’s finding on appeal.
7
seeking an award of $5,000. The court denied Whitney’s motions, and she
timely appealed.
II. DISCUSSION
A. Classification of the Parties’ Retirement Accounts
[¶11] Whitney argues that the trial court erred in its classification of the
parties’ retirement accounts by relying on the parties’ de facto separation to
characterize portions of Patrick’s accounts as nonmarital and by not setting
aside the nonmarital portions of her accounts as required by statute. She
further argues that the trial court erred by awarding her an account that does
not exist. “A court’s determination that a retirement benefit or account, or a
part thereof, is marital or nonmarital property is reviewed for clear error.”
Bojarski v. Bojarski, 2012 ME 56, ¶ 15, 41 A.3d 544. “However, we review the
application of the law to the facts de novo.” Id. “Although we ordinarily assume
that a trial court found all the facts necessary to support its judgment, when, as
here, a motion for findings has been filed and denied, we cannot infer findings
from the evidence in the record.” Mooar v. Greenleaf, 2018 ME 23, ¶ 7, 179 A.3d
307 (quotation marks omitted). “We confine our review to the court’s explicit
findings and determine whether those findings are supported by the record.”
Sulikowski v. Sulikowski, 2019 ME 143, ¶ 11, 216 A.3d 893.
8
1. The delineation of Whitney’s public employment retirement
accounts as marital or nonmarital property must be calculated
pursuant to the three-step process for division of property in
a divorce matter.
[¶12] “We have long recognized a three-step process for distributing
property in a divorce.” Laqualia v. Laqualia, 2011 ME 114, ¶ 13, 30 A.3d 838;
see 19-A M.R.S. § 953 (2021).6 “The trial court must first distinguish marital
from nonmarital property. Then, the court must set apart nonmarital property.
Finally, the court must divide marital property in such proportion as the court
deems just.” Laqualia, 2011 ME 114, ¶ 13, 30 A.3d 838 (citations and quotation
marks omitted).
[¶13] “The trial court has no discretion in the allocation of the
nonmarital property; it must be transferred to the spouse to whom it belongs.”
Id. ¶ 15 (quotation marks omitted). When a party in a divorce action has a
retirement account that accrued both before and during the marriage, the trial
court should first determine the present value of the account. See Skibinski v.
Skibinski, 2009 ME 13, ¶ 7, 964 A.2d 641. It should then determine the value of
6 Title 19-A M.R.S. § 953 has been amended twice since the divorce judgment was entered. See
P.L. 2021, ch. 122, § 3 (effective Oct. 18, 2021) (codified at 19-A M.R.S. § 953(1)(B)-(D) (2022));
P.L. 2021, ch. 285, § 1 (effective Oct. 18, 2021) (codified at 19-A M.R.S. § 953(10) (2022)). Although
the amendments do not affect our analysis, we nevertheless cite the statute that was in effect when
the judgment was entered.
9
the nonmarital portion that is to be set aside and determine the value of the
marital portion that is subject to division. See id.
[¶14] Title 19-A M.R.S. § 953(2) broadly defines “marital property” as
“all property acquired by either spouse subsequent to the marriage.”
“Nonmarital property” includes property that falls into the statutorily
enumerated exceptions to “marital property,” see id. § 953(2)(A)-(E), and
property acquired by either spouse before the marriage, see Miliano v. Miliano,
2012 ME 100, ¶ 16, 50 A.3d 534; Long v. Long, 1997 ME 171, ¶ 9, 697 A.2d 1317.
[¶15] Here, Whitney testified that her MainePERS account had a balance
of $4,739.25 at the time of the marriage and a balance of $10,689.76 near the
time of trial. Whitney further testified that her CalSTRS account had a balance
of $3,018.66 as of January 2021. Although the court correctly determined the
present value of Whitney’s MainePERS account, the court erred by not setting
aside to Whitney as her nonmarital property the $4,739.25 that was in the
account before the marriage. See 19-A M.R.S. § 953(1)-(2); Miliano,
2012 ME 100, ¶ 16, 50 A.3d 534. Similarly, the court correctly determined the
present value of Whitney’s CalSTRS account, but the court’s determination that
the account was wholly nonmarital is not supported by the record because the
undisputed evidence shows that the account was established during the
10
marriage. See 19-A M.R.S. § 953(1)-(2); Miliano, 2012 ME 100, ¶ 16,
50 A.3d 534.
[¶16] Patrick concedes that the trial court’s findings are erroneous but
argues that—at least to some extent—the errors are harmless because the trial
court awarded to Whitney all retirement accounts in her name. Patrick
contends that the court does not have to “do math with surgical precision” and
that “[r]ough mathematical justice is sufficient.” Because we cannot say that it
is highly probable that the trial court’s division of marital property was not
affected by its erroneous findings, the errors are not harmless. See Marston v.
Marston, 2016 ME 87, ¶ 9, 141 A.3d 1106.
2. The relevant date for determining the marital and nonmarital
portions of Patrick’s retirement accounts is not the date of the
parties’ de facto separation but rather the date of the entry of
the divorce judgment.
[¶17] As mentioned above, “nonmarital property” refers to property that
falls into any one of the exceptions to “marital property” listed in
section 953(2)(A)-(E). One such exception is “[p]roperty acquired by a spouse
after a decree of legal separation.” 19-A M.R.S. § 953(2)(C). Separation decrees
are governed by 19-A M.R.S. § 851 (2022). “[O]nce a decree of separation has
been entered, all marital property distributed to each spouse by decree and all
property newly acquired by each spouse after the decree will thereafter be
11
treated as nonmarital property pursuant to subsection 953(2)(C) if the parties’
marriage is subsequently dissolved through a divorce decree.” Levy, Maine
Family Law § 7.6[4][c] at 7-41 (8th ed. 2013).
[¶18] Generally, property acquired during a de facto separation,
however, is marital. In Kaye v. Kaye, 538 A.2d 288, 289 (Me. 1988), the husband
argued that the trial court had impermissibly characterized property that he
had acquired by his sole effort after he and his wife had separated as marital.
We disagreed and held that
[t]he legislative definition of all property acquired after marriage
and prior to “a decree of legal separation” as presumptively marital,
constitutes a deliberate choice of a clear demarcation point
evidenced by a formal decree. In the absence of a judicially
sanctioned separation, the parties’ agreement to a de facto
separation does not prevent the marital presumption from
attaching to subsequently acquired property.
Id. (examining the predecessor statute to 19-A M.R.S. § 953). Similarly, in
Doucette v. Washburn, 2001 ME 38, ¶¶ 2-6, 766 A.2d 578, the husband argued
that the trial court should have set aside to him as his nonmarital property a
workers’ compensation lump sum award that he received while the parties
were living apart. Citing section 953(2)(C) and Kaye, we summarily rejected
his argument, stating that it had “no merit.” Id. ¶ 16 n.10.
12
[¶19] The record is clear regarding the parties’ separation. Patrick and
Whitney began living apart in February 2019 when Whitney moved to
California. At that time, they signed an agreement in which they expressly
stated that they were not legally separating. Whitney filed a petition for legal
separation in California and had Patrick served with the paperwork in
June 2019. Patrick filed for divorce a few days later. There is no evidence in
the record that any court ever issued a decree of legal separation, and the
parties do not contend that they were legally separated.
[¶20] Although the trial court did not expressly find that the parties had
legally separated, see 19-A M.R.S. § 953(2)(C), the trial court assigned a total
value of $216,252.24 to Patrick’s retirement accounts based on the “date of
separation.” In doing so, the trial court implicitly found that the increase in
value of Patrick’s retirement accounts after the parties’ de facto separation was
Patrick’s nonmarital property. This erroneous finding resulted in more than
$140,000 being improperly classified as Patrick’s nonmarital property given
the undisputed evidence showing that Patrick’s retirement accounts had a
balance of $357,063.50 at the time of trial.7
7The trial court did not find—and the record would not have supported a finding—that the
approximately $140,000 increase in the value of Patrick’s retirement accounts after the parties’
de facto separation was solely due to “[a]ppreciation resulting from market forces” or “[a]ppreciation
13
[¶21] When a court divides the marital estate, it may consider “all
relevant factors,” 19-A M.R.S. § 953(1), including the duration of the marriage,
see Monahan v. Monahan, 2015 ME 65, ¶¶ 3, 6, 116 A.3d 950; Eaton v. Eaton,
447 A.2d 829, 831 (Me. 1982). The duration of the marriage is not a relevant
factor, however, in determining whether property is marital or nonmarital. See
Laqualia, 2011 ME 114, ¶ 15, 30 A.3d 838. “The equitable considerations
applicable to the just division of marital property do not apply to the setting
apart of nonmarital property.” Id. (quotation marks omitted).
3. The trial court erred by double counting Whitney’s Vanguard
retirement accounts.
[¶22] Whitney submitted an updated financial statement before trial in
which she indicated that her Vanguard accounts had both marital and
nonmarital components and a combined value of $15,773.67. At trial, Whitney
produced a current account statement showing that the balance of the accounts
had increased to $16,031.48 since she submitted her updated financial
statement and that the accounts had a balance of $3,817.41 at the time of the
marriage—a difference of $12,214.07. The trial court found that Whitney’s
Vanguard accounts were presently valued at $15,773.67 and $12,214.07 and
resulting from reinvested income and capital gain.” 19-A M.R.S. § 953(2)(E)(1); see Miliano v. Miliano,
2012 ME 100, ¶¶ 13, 23, 50 A.3d 534.
14
that they were entirely marital. The trial court’s findings are erroneous for two
reasons. First, it appears that the court mistakenly double counted Whitney’s
Vanguard accounts, thereby awarding her an account that did not exist. Second,
although competent evidence in the record supports the trial court’s finding
that $12,214.07 of Whitney’s Vanguard accounts was marital property where
the accrual occurred during the marriage using marital funds, the trial court
erred by not determining the accounts’ present value and by not setting aside
the $3,817.41 that existed at the time of the marriage to Whitney as her
nonmarital property.
[¶23] In sum, we vacate the trial court’s findings regarding both parties’
retirement accounts and remand to the trial court to redetermine the marital
and nonmarital portions of each retirement account of each party and reassess
the fairness of the division of the marital estate. See Cole v. Cole, 561 A.2d 1018,
1021 (Me. 1989). Although divorce actions present many challenges,
particularly when complicated financial matters are involved, the challenges
are not insurmountable. “By applying a clear, step-by-step analysis pursuant
to statutory mandates, and allocating appropriate burdens of proof along the
way, counsel and the courts can make their way through the potential legal
quagmire that these cases often present.” Miliano, 2012 ME 100, ¶ 11,
15
50 A.3d 534; see also Axtell v. Axtell, 482 A.2d 1261, 1264 (Me. 1984) (“Casting
the judgment in specific amounts will make the result more comprehensible for
the litigants and will facilitate appellate review . . . .” (quotation marks
omitted)).
B. Attorney Fees
[¶24] Title 19-A M.R.S. § 105(1) (2022) provides that, in a divorce action,
the court may order a party to pay another party’s reasonable attorney fees.
A decision on a request for an award of attorney fees “necessarily requires
consideration of the parties’ relative capacity to absorb the costs of litigation in
addition to all other relevant factors that serve to create a fair and just award
under the totality of the circumstances.” Riemann v. Toland, 2022 ME 13, ¶ 42,
269 A.3d 229. “The court must provide a concise but clear explanation of its
reasons for grant or denial of the fee award.” Neri v. Heilig, 2017 ME 146, ¶ 16,
166 A.3d 1020 (quotation marks omitted). “We review a trial court’s decision
on attorney fees for an abuse of discretion.” Sulikowski, 2019 ME 143, ¶ 20,
216 A.3d 893.
[¶25] Because we vacate the portion of the judgment dividing the parties’
marital property, we also vacate the trial court’s denial of Whitney’s request for
attorney fees. On remand, in determining whether to award Whitney attorney
16
fees, the trial court must consider the disparity in the parties’ income and
assets, as well as any other factors that the court deems relevant, and articulate
the reason for its decision.
The entry is:
The judgment is vacated as to the property
division and attorney fees. The remainder of the
judgment is affirmed. Remanded for further
proceedings consistent with this opinion.
Kelley E. Mellenthin, Esq. (orally), Lincolnville Center, for appellant Whitney D.
Moran
Scott J. Lynch, Esq. (orally), Lynch & VanDyke, P.A., Lewiston, for appellee
Patrick R. Moran
Belfast District Court docket number FM-2019-116
FOR CLERK REFERENCE ONLY