In re the Marriage of: John Arthur Lodwig & Melanie Isha Lodwig ( 2019 )

FILED
MARCH 28, 2019
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
IN RE THE MATTER OF THE )
MARRIAGE OF ) No. 35832-1-III
)
JOHN ARTHUR LODWIG, )
)
Respondent, )
) UNPUBLISHED OPINION
and )
)
MELANIE ISHA LODWIG, )
)
Appellant. )
FEARING, J. — In this marital dissolution suit, Melanie Lodwig appeals the
division of property relating to a storage facility owned by her and John Lodwig, the
valuation of John’s commercial construction business, and an award of maintenance.
Since Melanie fails to cite to the record to support some of her arguments and because the
trial court did not abuse its discretion, we affirm.
No. 35832-1-III
In re Marriage of Lodwig
FACTS
Melanie Lodwig’s statement of the case in her opening brief lacks any citation to
the trial court record in violation of RAP 10.3(a)(5). Thus, we glean our facts from the
citations to the record found in John Lodwig’s brief.
John Lodwig and Melanie Lodwig, now Summers, wed on August 22, 2002. John
and Melanie separated on July 19, 2016. At the time of the marital dissolution, Melanie
was age 44 and John age 56. Melanie has three years of college education in biology and
a certification in graphic design. During trial, Melanie described herself as “a 45-year-
old entrepreneur, business owner, senior executive, educated, and intelligent woman, a
devoted community member and mother.” Clerk’ Papers (CP) at 56. The marriage
produced two children, ages 10 and 15 at the time of the dissolution.
This appeal in part concerns the marital community business of Baker Flats
Recreational Self Storage, Inc. (Baker Flats), which operates a public storage facility.
John and Melanie Lodwig constructed the storage buildings in 2006, four years after their
marriage. Cinco Properties, LLC (Cinco Properties) owns the buildings and land on
which the storage buildings sit. Melanie and John Lodwig equally owned Cinco
Properties at the time of the marital dissolution.
John Lodwig founded a construction firm, Clearwater Custom Homes, Inc.
(Clearwater), in 2001, one year before he and Melanie wed. Clearwater has no
employees other than John. The construction company’s only physical assets are a used
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truck and hand tools. Clearwater sometimes struggled, but on occasion found success
constructing commercial buildings for Washington Mutual, Sleep Country, and 7-11 and
building school district facilities. Clearwater now only assumes small jobs for smaller
profit, because John, at his age, can no longer work long hours.
Baker Flats and Clearwater served as the primary source of the couple’s income
during the marriage. Melanie Lodwig worked for Baker Flats and Clearwater during the
early stages of the respective companies’ development and minimally over the last few
years of the marriage. Melanie performed marketing services for both Clearwater and
Baker Flats, and she built the website for each company. Otherwise, Melanie performed
the critical role of raising the children.
Throughout the marriage, Melanie Lodwig helped friends market businesses and
designed logos for some of the businesses. The friends typically paid Melanie in trade.
Melanie now plans to operate a float spa in Chelan, and she believes this venture will
provide income of $10,000 per month. Her testimony did not clarify whether the $10,000
per month would be gross or net income. A float spa is similar to a tanning salon where
one enters a “pod” and floats in high density salt water. The pod functions as a sensory
deprivation tank that serves to reduce stress.
PROCEDURE
John Lodwig filed for marriage dissolution on July 19, 2016, and the court
conducted a dissolution trial on May 12, 2017. In anticipation of trial, the parties hired
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certified public accountant Rick Linder, who valued the construction company,
Clearwater Custom Homes, to be between $94,000 and $127,000. John Lodwig valued
the business in his trial brief at $50,000. During trial testimony, he declared that, if
someone paid him between $50,000 and $100,000, he would sell the company. Melanie
did not testify as to her opinion of Clearwater’s value at trial. In her trial brief, Melanie
wrote that Clearwater “carries an intrinsic value of approximately $130,000.” CP at 6.
John Lodwig testified at trial that Baker Flats generates income now and also
functions as a retirement fund. Both John and Melanie testified that each intended to rely
on Baker Flats and Cinco Properties for income in the future. When asked about
retaining ownership of the Baker Flats and Cinco Properties entities, John responded:
I think it’s imperative to keep Baker/Cinco for the well-being of the
kids and the well-being of Melanie and the well-being of myself.
There’s a—there’s a house of cards with all three businesses where
in the past one business could shore up another one. If Clearwater got, you
know, short on money and it needed money for temporary, I could have the
ability to shift it over. If Clearwater was strong and those companies—I
could shift it back that way. Clearwater supported, 100 percent supported,
Baker Flats for many, many years. Otherwise, Baker Flats wouldn’t be
there. So Baker Flats had acquired enough money and Cinco had acquired
enough money to where that need wouldn’t have been there.
But right now if you look at the global picture Clearwater is, you
know, in trouble. So I would stress that . . . until the kids are grown . . . if
we maintain that ownership it would be best. It would be best in the
interest of both of us.
But at 62 years old I would be able to sell it and probably stretch
whatever comes out of it to my end zone or end game provided that the
economy was good and it didn’t tank.
Report of Proceedings (RP) at 48-49.
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The trial court valued the combined worth of Baker Flats and Cinco Properties at
$1,850,000. The court awarded fifty percent ownership of the two corporations to each
spouse. The trial court valued the Clearwater business at $77,000 and awarded John
Lodwig one hundred percent ownership of the construction firm. The trial court awarded
Melanie Lodwig the parties’ family home, a $136,000 equalization payment, and $48,000
in spousal maintenance to be paid for two years at $2,000 per month. This final division
granted Melanie $744,595 and John $743,024 in assets.
The marriage dissolution court also ordered:
Both parties shall take all necessary actions to implement the terms
of the Final Divorce Order. In the event that either party fails to perform
said acts, the other party may seek enforcement through the Court. The
party seeking enforcement through the Court shall be awarded all legal fees
and costs associated with bringing the action for enforcement[.]
John Lodwig shall pay Melanie Lodwig $136,000 by June 30,
2017[.]
John Lodwig will run Baker Flats’ day to day operations. Melanie
Lodwig shall have access to monthly profit and loss statements and access
to all bank statements for Baker Flats and Cinco Properties. John Lodwig
shall notify Melanie Lodwig of any single purchase or other expenditure
that is greater than $3,000 per transaction.
The monthly net income of Baker Flats shall be distributed 40% to
Melanie Lodwig, 40% to John Lodwig and 20% to the Cinco reserve
account. When the Cinco reserve account reaches a $35,000 balance, the
Baker Flats monthly net income shall be distributed equally between
Melanie Lodwig and John Lodwig. In the event that the reserve account
balance is reduced to below $35,000 the net income of Baker Flats shall be
distributed 40% to Melanie Lodwig, 40% to John Lodwig and 20% to the
Cinco reserve account until the balance again reaches $35,000.
RP at 39-40.
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After the dissolution court issued its ruling, Melanie Lodwig filed a motion to
reconsider seeking “a court order to properly value and allocate the asset and liability
division ordered by Judge Small at trial . . . , as well as to seek and receive a just award of
spousal maintenance.” CP at 46. As part of the motion, Melanie claimed that the parties
stipulated to a value of Clearwater at $127,000. The trial court denied the motion. In its
denial, the trial court wrote:
No Evidence of a Stipulation as to Value of Clearwater
The court could not find any written stipulation that the parties had
agreed to a value for Clearwater Construction. Indeed, Petitioner’s Trial
Brief lists the value at $50,000.
The court does recall the parties stipulated to the admissibility of one
expert’s opinion of the value. There was no stipulation as to the value of
that asset. Had there been the court would reconsider its decision on this
issue.
Instead, the court considered all the evidence offered by both parties
and found the value was not $50,000 as argued by Petitioner and not
$127,000 as argued by Respondent. The court found the value to be
$77,000.
....
Maintenance
Maintenance payments began early on in this dissolution.
Respondent was advised to find employment early on in this dissolution.
As respondent stated in her recent declaration:
“I am a 45-year-old entrepreneur, business owner, senior executive
officer, educated and intelligent woman—I have been in and part of the
construction and real estate industry my entire life.”
Two additional years of maintenance, considering the economic
circumstances of the parties, their ages, education and experience, and the
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duration of the marriage is what the court determined to be reasonable. The
court still does.
CP at 78-79.
LAW AND ANALYSIS
Melanie Lodwig appeals the trial court’s division of property. Pursuant to this
assignment of error, she also challenges the trial court’s valuation of John’s construction
business. Finally, Melanie appeals the amount of her maintenance award.
Valuation of Clearwater Custom Homes
Melanie Lodwig challenges the trial court’s valuation of the parties’ commercial
construction business on two grounds: (1) the parties filed by exhibit an agreed value
significantly higher than that adjudged by the court, and (2) the court arrived at a
valuation unsupported by any admissible evidence. Melanie fails to cite to any portion of
the record to support her claim that the parties stipulated to the value. RAP 10.3(a)(6)
requires an appellant to cite to the relevant portions of the record in the argument section
of her brief. A party must cite to the record for the testimony about which she assigns
error. Glazer v. Adams, 64 Wash. 2d 144, 149, 391 P.2d 195 (1964). Therefore, we decline
review of this first argument.
John Lodwig argues that the trial court’s valuation of the construction business lay
within the values presented at trial, such that substantial evidence supported the
judgment. We agree.
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Property valuation is a factual determination that must be supported by substantial
evidence in the record. In re Marriage of Sedlock, 69 Wash. App. 484, 492, 849 P.2d 1243
(1993). An owner may testify to the value of his or her property, and the trial court
determines the weight given to the testimony. Worthington v. Worthington, 73 Wash. 2d
759, 763, 440 P.2d 478 (1968). When the trial court’s valuation lies between the highest
value given by one witness and the lowest value rendered by another witness, substantial
evidence supports the findings. In re Marriage of Soriano, 31 Wash. App. 432, 435, 643
P.2d 450 (1982). Said another way, when parties offer conflicting evidence on the value
of the property, the trial court may adopt the value asserted by either party or any value in
between. When the trial court has weighed the evidence, this court will not substitute its
own judgment for that of the trial court or weigh the evidence or credibility of witnesses.
In re Marriage of Rich, 80 Wash. App. 252, 259, 907 P.2d 1234 (1996).
A jointly hired evaluator estimated Clearwater Custom Homes to be between
$94,000 and $127,000, while John valued the business somewhere between $50,000 and
$100,000. Although Melanie did not offer her opinion as to the company’s value at trial,
she presented an approximate figure of $130,000 in her trial brief. The dissolution court
valued the business at $77,000. Because the trial court’s valuation of Clearwater at
$77,000 fell within the range of credible evidence, we affirm the trial court’s valuation.
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In re Marriage of Lodwig
Division of Property
Next Melanie Lodwig assigns error to the trial court’s dividing of the corporation
Baker Flats into equal shares. In a dissolution action, the trial court must make a “just
and equitable” distribution of the parties’ marital property. In re Marriage of Griswold,
112 Wash. App. 333, 339, 48 P.3d 1018 (2002). The trial court’s distribution of property in
a dissolution action is guided by 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. RCW 26.09.080. Other
relevant factors include “the health and ages of the parties, their prospects for future
earnings, their education and employment histories, their necessities and financial
abilities, their foreseeable future acquisitions and obligations, and whether ownership of
the property is attributable to the inheritance or efforts of one or both spouses.” In re
Marriage of Gillespie, 89 Wash. App. 390, 399, 948 P.2d 1338 (1997). In weighing these
factors, a dissolution court has broad discretion in distributing marital property and
liabilities, and its decision will be reversed only if there is abuse of discretion. In re
Marriage of Kraft, 119 Wash. 2d 438, 450, 832 P.2d 871 (1992). Nonetheless, the trial
court is not required to divide community property equally. In re Marriage of Rockwell,
141 Wash. App. 235, 243, 170 P.3d 572 (2007).
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The spouse who challenges such decisions bears the heavy burden of showing a
manifest abuse of discretion on the part of the trial court. In re Marriage of Landry, 103
Wash. 2d 807, 809, 699 P.2d 214 (1985). The Supreme Court wrote in Marriage of Landry:
Trial 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.
In re Marriage of Landry, 103 Wash. 2d at 809.
Melanie Lodwig contends that the trial court erred by not awarding all of the
ownership interest in Baker Flats to one party and presumably awarding the other party
an equalization payment. She argues that the trial court erroneously forced the parties to
become tenants in common. Conversely, John argues that: (1) Melanie raised her
tenancy in common argument for the first time on appeal, and (2) the dissolution court
did not create a tenancy in common since a corporation owns the real estate. We agree
with John’s first contention and do not reach the second argument.
We find nowhere in Melanie’s trial brief, trial testimony, or motion seeking
reconsideration a request that the court award 100 percent ownership of Baker Flats to
one party in order to avoid a tenancy in common. Appellate courts will generally not
entertain issues raised for the first time on appeal. RAP 2.5(a). The trial court deserves
the opportunity to review an argument before this court entertains the contention.
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Maintenance
Finally, Melanie Lodwig challenges the dissolution court’s maintenance award.
She contends the court failed to consider each parties’ ability to pay and each parties’
need for support and thus granted an unfair small amount. We disagree.
Melanie Lodwig contends that the maintenance award affords her insufficient time
and resources to become self-sufficient following the termination of a seventeen-year
marriage. Melanie cites to an article published in the Washington State Bar News written
by Judge Robert Winsor who purportedly created three categories of marriage: (1) a
short-term marriage, lasting five years or less, (2) a long-term marriage lasting 25 years
or more, and (3) an intermediate term of all marriages in between. Melanie states,
without citation to authority, that, in long-term marriages, the trial court’s objective is to
place the parties in roughly equal financial positions for the rest of their lives. Melanie
declares that her marriage to John was 17 years, even though the trial court concluded the
marriage lasted less than 14 years. She further argues, without citation to authority, the
absence of a material difference between a marriage of 17 years and a marriage of 25
years. Melanie concludes that, without additional findings of fact, the arbitrariness of the
dissolution court’s maintenance decision is manifest.
We review the dissolution court’s award of spousal maintenance for abuse of
discretion. In re Marriage of Zahm, 138 Wash. 2d 213, 226-27, 978 P.2d 498 (1999). This
court finds an abuse of discretion only if the trial court bases its award or denial of
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maintenance on untenable grounds or for untenable reasons. In re Marriage of Wright,
78 Wash. App. 230, 237-38, 896 P.2d 735 (1995). The overriding concern is the economic
position in which a dissolution decree leaves the parties. In re Marriage of Washburn,
101 Wash. 2d 168, 181, 677 P.2d 152 (1984).
RCW 26.09.090 outlines the factors the court should consider in determining
maintenance. This nonexclusive list of factors includes:
(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;
(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.
RCW 26.09.090(1)(a)-(f).
Melanie may premise her appeal of the maintenance award on language from In re
Marriage of Rockwell, 141 Wash. App. 235 (2007). The Rockwell court stated that, in
long-term marriages of over twenty-five years “the trial court’s objective is to place the
parties in roughly equal financial positions for the rest of their lives.” In re Marriage of
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Rockwell, 141 Wash. App. at 243. Melanie’s apparent reliance on Rockwell is flawed. This
court considered and rejected an argument similar to Melanie’s contention in a recent
case. In In re Marriage of Doneen, 197 Wash. App. 941, 391 P.3d 594 (2017), review
denied, 188 Wash. 2d 1018, 396 P.3d 337 (2018), the wife appealed the trial court’s
property division that left her with less than fifty percent of the community assets. She
argued that, under Rockwell, the court was required to equalize the financial
circumstances of the parties because of their forty-five-year marriage. This court rejected
the argument and discerned Rockwell’s language as “permissive in nature, not
mandatory.” In re Marriage of Doneen, 197 Wash. App. at 950. This court noted that the
trial court properly considered all of the circumstances of the marriage while exercising
its discretion to attain a result in accordance with RCW 26.09.090.
While this court agrees with the analysis in Doneen, we also deem Melanie
Lodwig’s argument misplaced. Melanie and John’s marriage cannot be coined as “long-
term” under Rockwell because the marriage did not last twenty-five years. Second,
Melanie apparently relies on Rockwell in arguing that the trial court’s maintenance award
was manifestly unreasonable. Yet, the Rockwell court did not analyze a challenge to a
maintenance award, rather the court discussed the duration of the parties’ marriage when
it was confronted with a challenge to the unequal distribution of community property.
After finding that Melanie Lodwig has need and John has the ability to pay, the
trial court ordered John to pay $2,000 per month starting on June 10, 2017 and ending on
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May 31, 2019. Sufficient evidence supports the trial court’s award. The court considered
Melanie’s declaration wherein she states, “I am a 45-year-old entrepreneur, business
owner, senior executive, educated, and intelligent woman.” CP at 56, 79. Melanie also
testified regarding her float spa business, for which she already has a business plan. She
averred that the business will produce $10,000 per month. Melanie convinced the court
“that her business plan was well thought out and would probably result in her owning a
business well suited to the Chelan/Manson area and the well-to-do tourists and part-time
residents.” CP at 78-79. The dissolution court further concluded that, by providing
Melanie with income from Baker Flats and maintenance for two years and awarding her
the family home, Melanie could thrive.
Attorney Fees
John Lodwig requests an award of reasonable attorney fees and costs on appeal
under RCW 26.09.140 and RAP 18.9. Under RCW 26.09.140, the court may award one
divorcing spouse attorney fees based on the respective financial resources of the party.
Since John has sufficient resources, we decline his request under the statute.
An award of fees is proper when a party files a frivolous appeal. RAP 18.9(a).
John argues that Melanie’s appeal is frivolous because her brief (1) lacks citation to the
record, (2) contains material misrepresentations, and (3) presents no facts or arguments
that could create a debatable issue. An appeal is frivolous when it presents no debatable
issues and is so devoid of merit that there is not a reasonable possibility of reversal.
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Streater v. White, 26 Wn. App. 430,435,613 P.2d 187 (1980). While Melanie's brief
lacks citation to the record as required by RAP 10.3, we do not find all of her arguments
frivolous.
In a response brief footnote, John Lodwig accurately informs this court that
Melanie's entire statement of the case lacks citation to the appellate record in violation of
RAP 10.3(a)(5). The remedy provided by RAP 10.7 is to return the brief for corrections
or to impose other sanctions. We impose sanctions of $150 against Melanie Lodwig and
direct that she pay these sanctions to Chelan-Douglas County Volunteer Attorney
Services. Melanie shall provide this court a receipt for the payment within thirty days.
CONCLUSION
We affirm all rulings of the dissolution court.
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.
Fear~ \ <:f-:
WE CONCUR:
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Siddoway, J. Pennell, A.CJ.
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