In re the Marriage of Hackley , 60 Or. App. 601 ( 1982 )

YOUNG, J.

Husband appeals from a decree of dissolution and assigns as error the property division. We modify the decree.

At the time of trial, the parties had been married 25 years. Husband was 50 years old and wife 51 years old. Both are in good health, although wife has had surgery for varicose veins, and that condition is apparently recurring. There are three children, who are all emancipated. Husband is a college graduate, and wife is a trained x-ray technologist. From 1956 until 1973, husband worked as a salesman in his father’s clothing store in California. From 1973 to 1977, he operated a ranch without financial success in northern California and worked for a building contractor and for Siskiyou County. In 1977, the parties moved to Oregon. Currently, husband appears to be working part-time as a farm laborer. Wife has worked full-time and part-time throughout the marriage, primarily in radiology. During the past four years, she has not had steady employment.

Husband argues that the trial court awarded wife 85 percent of the assets. He explains that this lopsided division occurred, in part, because of the trial court’s misinterpretation of the husband’s trial memorandum, which the court used to assign values to the assets. Husband contends that the home and an unimproved lot should be sold, the indebtedness paid and the remaining proceeds divided evenly. He also proposes that the “sterling and silver” be divided or sold.

The trial court made a division of the real property and then divided the personal property as proposed by husband’s trial memorandum, except that wife was awarded the encyclopedias and library, the sterling and the silver and one antique trunk.¹ The trial court’s division of all of the assets and the liabilities was as follows:

Assets² Wife Husband

Home $ 90,000

One-half interest in Santa -0-

Paula, California, Real Property Unimproved lot $ 6,000

Vehicles 2,800 900

Personal property ordered sold 822 822

Other personal property 39,500 34,700

TOTAL .................... $133,122 '$ 42,422

Liabilities

Mortgage $ 47,500

Promisory Notes - Mary Thille $ 12,500

Promisory Note - Citizen’s State Bank 13,500

TOTAL .................... ($ 47,500) ($ 26,000)

NET ASSETS 85,622 $ 16,422

The trial court found it inappropriate to award wife spousal support and ordered the parties to pay their own attorney’s fees and costs. Wife has not cross-appealed.

Husband’s contention that the trial court misinterpreted his trial memorandum and thereby assigned incorrect values to the personal property is correct.³ The trial judge used the total value of the personal and real property as the value of the personal property. Because husband had proposed an equal division of the real property (home and lot), the parties were equally affected by that error and no prejudice resulted. There remains, nonetheless, an unequal property division. The extent of the disparity depends on the consideration given to the parties’ interest in husband’s parents’ property in California and whether the debt to Mary Thille is real or illusory.

In 1971, while husband was working in his father’s store, his parents conveyed to the parties a one-half interest⁴ in the parents’ home in California. In 1974, after the father’s business had been sold, the parties and husband’s parents borrowed $52,000 from a bank to enable the parties to finance the purchase of a ranch in northern California. In 1976, the bank required that the loan be refinanced and secured by a deed of trust on the parents’ home. The trust deed was executed by the parents and husband and wife. The present loan balance is $13,500, which the trial court directed husband to pay.

The trial court awarded husband “[t]he interest of the parties, if any, in * * * the [California] property * * *” but did not place a value on that interest. On this record, we conclude that the trial judge considered that property as an asset having some substantial value. Otherwise, there is no explanation or justification in the record for the disparate division of the net assets.

Husband does not consider the interest in his parents’ property to be an asset but claims that there is a valid and enforceable debt owing to his friend Mary Thille. Wife takes the contrary position that the asset is real but the debt is not. Evidence that sharply contradicts husband’s claim that the “half interest” has no value is that in 1977 he claimed that interest as an asset worth $32,500 in a personal loan application and financial statement. We find, as did the trial judge, that the California property is an asset and that the debt to Mary Thille is a liability. On the basis of wife’s testimony and husband’s loan application, we value the one-half interest in the Santa Paula property at $32,500. Correcting the trial court’s evaluation of the personal property and adding $32,500 to husband’s share results in a division of net assets to husband of $23,627 and net assets to wife of $62,426, a difference in wife’s favor of $38,799 or roughly 72 percent of the assets.⁵

ORS 107.105(1)(e) requires the court in a dissolution proceeding to make a division of property that is “just and proper in all the circumstances.” In Halvorson and Halvorson, 48 Or App 887, 890, 618 P2d 20 (1980), we said:

“[T]he goal in distributing assets of a long-term marriage, such as this one, is to ensure that the parties separate on as equal a basis as possible, under the circumstances. * * * Generally, an equal division of property is preferred unless circumstances suggest a different result. * * *” (Citation omitted.)

The circumstances here do not justify wife being awarded three times as much property as awarded to husband.

Wife argues, on the basis of the length of the marriage and the disparity of earning capacity, that she should retain the home, subject to the mortgage. See Moore and Moore, 56 Or App 90, 92-93, 641 P2d 74 (1982); Simmons and Simmons, 55 Or App 773, 639 P2d 1296 (1982). The difficulty is that there is insufficient evidence to determine the earning capacity of either party. There are no income tax returns in evidence. Husband testified to earnings of $5,000 during the year preceding the trial. There is no evidence of wife’s earning capacity. That husband may be short on ambition does not entitle wife to an overly disproportionate share of the assets; nothing in this record shows that were he long on ambition, his earning potential would exceed that of wife.

In order to accomplish a 50/50 division of the assets, husband would, in addition, be entitled to one-half of $38,799, or $19,399. However, for several months since the separation wife made the payments on the mortgage with two of the emancipated children providing her financial assistance amounting to about $2,300, which wife intends to repay.

To arrive at a just and proper division, we have taken into account wife’s obligation to the children and award to husband a judgment against wife in the sum of $18,000, together with interest at 9 percent per annum from the effective date of this decision, to be paid on or before five years from the effective date of this decision. The decree is modified accordingly and affirmed as modified.⁶ No costs to either party.

1 The trial memo did not place a value on the encyclopedias and library and the sterling and other silver. Two antique trunks were valued at $75.

2 We have added as an asset the estimated value of the personal property that the trial court ordered to be sold, which was in addition to the personal property that was divided.

3 It appears that the miscalculation by the trial court was due, in part, because husband’s trial memo did not subtotal the value of the real -and personal property and because the values assigned to the vehicles by the trial court were included again in the value of the “other personal property.”

4 There is no evidence about how or why the joint interest was created.

Corrected

Property Division

Assets Wife Husband

Home $ 90,000

Unimproved lot 6,000

One-half interest in Santa Paula property 32,500

Vehicles 2,800 900

Personal property 16,266 9,442

Antique trunk 37.50 (-37.50)

Personal property to be sold 822,50 822.50

Total 109,926.00 49,627.00

Liabilities

Mortgage 47,500

Notes - Mary Thilles 12,500

Note - Citizens State Bank 13,500

Total (47,500) (26,000)

Total NET ASSETS 62,426 23,627

5 This corrected property division essentially corresponds with wife’s computation, except that she values the one-half interest in the Santa Paula property at $35,000. There is no evidence to support that evaluation.

6 This gives wife the sterling and the other silver. Husband has not advanced sufficient reason for us to disturb the trial court’s division of those assets.