In the Matter of the Marriage of: Shannon Jones & Anthony Jones ( 2021 )

FILED
JANUARY 19, 2021
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 the Matter of the Marriage of: ) No. 36605-7-III
)
SHANNON JONES, )
)
Appellant, )
)
and ) UNPUBLISHED OPINION
)
ANTHONY JONES, )
)
Respondent. )
LAWRENCE-BERREY, J. — Shannon Jones appeals and Anthony Jones cross
appeals various aspects of the trial court’s decision in their dissolution action. We agree
with Mr. Jones that the trial court erred when it designated a parcel of property
community property. Mr. Jones’s mother gifted an undivided one-half interest in that
parcel to her son before he married and gifted her remaining interest to her son, not the
community, after he married. We affirm all other aspects of the trial court’s decision.
FACTS
Shannon Jones and Anthony Jones married in October 1998 and separated in
July 2017. They have three children, two of whom were minors at the time of trial.
No. 36605-7-III
In Marriage of Jones
During their marriage, the Joneses owned and operated a business that provided
assisted living care for disabled persons. The business—Arthur Arms Adult Family
Homes and Sunshine Place—was run from two properties, 648 and 652 South Arthur
Street.
Business value
The business’s profits varied from year to year depending on spending. The
Joneses’ joint tax returns showed net profit of $63,533 in 2013, $51,995 in 2014, $30,124
in 2015, and $83,654 in 2016. The parties did not pay themselves wages or draw salaries.
However, they transferred $2,000 per month from the business account to cover their
family’s basic expenses.
Ms. Jones testified the business was worth $400,000. As a co-owner, she paid
some bills and had access to tax documents. To estimate the value of the business, she
searched for recently sold homes in Spokane comparable to the properties from which the
business was run. She offered her comparable as an exhibit, which Mr. Jones objected to
on grounds of hearsay, authentication, and relevancy. On cross-examination, Ms. Jones
acknowledged the exhibit did not list the address of the comparable, and the comparable
had many features that the business properties did not. The comparable was a piece of
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property that could be used as an adult family home, but was not a business for sale. The
court did not admit the exhibit into evidence.
Mr. Jones explained the nature of the business, including the work it entails, the
licensing, and its employees. He testified that neither the business license nor its clients
can be sold. He explained that he laid off the business’s employees and did all of the
work himself when the business did not generate enough income. He testified, despite the
tax returns that showed a profit, there was little money left in the business account after
expenses were paid.
The trial court found that the business’s value was not proved at trial but said that
did not impact its allocation of assets and debts. The business was primarily an “income-
generating mechanism for the community.” Report of Proceedings (RP) at 405. The
court explained:
This business is unique in that it’s not really sellable. Again, these
are homes that are specially licensed for mental health residential treatment
essentially and these are not easily transferable or sellable types of business
[sic] as they are tied to the real estate. They’re also subject to extensive
regulations which this Court is very well aware of and it would not be easy
to expand the operations or profit-making ability of these businesses beyond
what they have been producing for the last several years.
. . . What it really boils down to is this was a business that produced
an income for the couple that in good years was around $65,000 . . . . I
don’t think it would be in the position to produce much more than that
unless there were major changes to Medicaid or Medicare pricing or
deregulation allowing for additional beds.
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....
. . . I’m indicating that the Court really didn’t hear compelling
testimony to determine the value of the business. I think the Court
considered the unique aspects of this business. . . .
RP at 406-07.
When the attorneys asked for clarification, the court answered, “[T]he value was
never proven outside establishing the value for the real estate. There was no evidence
other than that . . . the business was capable of producing at most $65,000 in income per
year and had a historic record of producing less than that for several years.” RP at 423.
648 S. Arthur
648 S. Arthur has been in Mr. Jones’s family for generations. Mr. Jones’s mother,
Alice Doss, owned and operated Sunshine Place from it. Before the Joneses married, Ms.
Doss added her son to the title and the two operated Sunshine Place together. In 1999,
Ms. Doss retired and her son took over the business. In 2012, Ms. Doss and her son
removed Ms. Doss from title by quitclaiming their interest to Mr. Jones. Specifically, the
deed recites that the grantors are “Alice Doss and Anthony Jones” and the grantee is
“Anthony Jones.” Ex. 11, at 3.
At trial, Ms. Jones asserted that 648 S. Arthur was community property. She
acknowledged it had previously belonged to Ms. Doss’s mother and then Ms. Doss. She
also acknowledged that the tax records classified the property as a gift to Mr. Jones.
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When asked why she believed the property was gifted to Mr. Jones and her, despite the
language in the deed and in the tax records, she answered that Ms. Doss gifted the
property to both of them so they could use it as collateral to buy 652 S. Arthur.
The trial court found that 648 S. Arthur was community property. It explained:
[W]hen there’s a question the Court starts with a presumption of community
property and the law is very clear that title is not necessarily indicative of
separate or community property and there really was no evidence to
overcome the presumption, other than the evidence that was submitted with
respect to the title and the circumstances of gifting that. But I did not find
in applying the preponderance of the evidence standard that that
presumption was overcome. So I think the proper characterization of all
property, real property, is that of community property.
RP at 395-96.1 The court added that it “would have made the same distribution award
determinations regardless of the character and regardless of stated value as the Court
believes that the distributions ordered to be fair, just, and equitable.” RP at 396.
Maintenance and child support
One year before trial, Ms. Jones requested temporary monthly maintenance of
$2,400. She asked for that amount in part because Mr. Jones was receiving all of the
business income, and she was working to establish a career for herself outside of that
business. At that time, Ms. Jones’s stated monthly expenses were $3,595 and her monthly
1
The court references the 643 address, but this appears to be an error because that
property’s classification was not contested.
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income was $1,252. The trial court found that Mr. Jones’s monthly income was around
$8,500 per month, but acknowledged complications of self-employment. The court
ordered monthly temporary maintenance of $2,000. It then considered this monthly
maintenance when calculating child support.
After trial, the court ordered that spousal maintenance remain at $2,000 per month
for 24 months until December 2020. In so ordering, it explained:
The Court was mindful in awarding maintenance . . . . This was a 19-year
marriage, so a significant length of marriage, and the Court looked at all the
factors as it’s required to do in RCW 26.09.090, but those are not exclusive,
those are a nonexclusive list. The Court also in making a maintenance
determination there was some accounting for the community business asset
going to Mr. Jones and she’s not going to have the benefit of that
community business.
. . . [T]he Court’s paramount consideration was need but other
factors including the business was [sic] considered. In looking at the
statutory factors, the Court also considered the ability to pay, the ages of the
parties, their future income projections, the standard of living during the
marriage, the relative health and ages of the parties, the distribution
decision this Court made related to the assets and debts, Ms. Jones’ ability
to meet her own needs, the Court’s award of child support, and the Court
considered the appropriate duration for maintenance payments under the
facts of this case. . . .
In taking into issues of equity, I think maintenance should be limited
in this case, so I’m ordering maintenance for 24 months. . . .
RP at 411-13.
The trial court ordered a shared parenting plan so the two youngest children would
spend equal time at each parent’s home. The court ordered Mr. Jones to pay child support
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In Marriage of Jones
based on a standard calculation, which is premised on the primary residential parent
having the children a majority of the time. The standard calculation required Mr. Jones to
pay $1,205 per month until July 2019, at which time the middle child turned 18, and then
$767 per month until the youngest child turned 18.
Net community property award
In the trial court’s oral ruling, it valued personal property, but neglected to value
the three parcels, including 648 S. Arthur, which it awarded to Mr. Jones. Nevertheless,
the parties filed a joint report before trial and were in near agreement as to the value of
the three parcels. Using Ms. Jones’s net values for the three parcels2 and the trial court’s
net values for the personal property, the total community property award was $128,346
for Ms. Jones and $323,869 for Mr. Jones. The court denied Ms. Jones’s request for an
equalization payment.
Reconsideration
Ms. Jones filed a motion for reconsideration. Among other things, she asked the
trial court to reconsider its finding that there was no proof of the business’s value. With
respect to this, the trial court explained that the business’s value was equal to the
2
643 S. Arthur ($75,761); 648 S. Arthur ($225,000); and 652 S. Arthur ($68,003).
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In Marriage of Jones
properties it ran out of. We construe this to mean that the business had no independent
value.
ANALYSIS
On appeal, Ms. Jones argues the trial court erred by finding there was insufficient
evidence of the business’s value and by denying her request for an equalization payment.
On cross appeal, Mr. Jones argues the trial court erred by designating 648 S. Arthur as
community property, granting spousal maintenance above Ms. Jones’s needs, and
declining to deviate from the standard child support calculation. We first address the
property issues and then the maintenance and child support issues.
A. PROPERTY ISSUES
1. BUSINESS VALUATION
Ms. Jones contends the trial court erred by finding there was insufficient evidence
of the business’s value. As mentioned above, we construe the trial court’s explanation in
its reconsideration ruling as meaning the business had no independent value. Construed
in this manner, substantial evidence supports this finding.
We generally do not disturb the trial court’s valuations so long as they are within
the scope of the evidence presented. In re Marriage of Mathews, 70 Wn. App. 116, 122,
853 P.2d 462 (1993). “This court will not substitute its judgment for that of the trial court
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In Marriage of Jones
on a disputed factual issue,” including property valuation. Worthington v. Worthington,
73 Wn.2d 759, 762, 440 P.2d 478 (1968). “An owner may testify as to the value of his
property and the weight to be given to it is left to the trier of fact.” Id. at 763. It is well
settled that the trial court weighs evidence and makes credibility determinations. In re
Marriage of Rideout, 150 Wn.2d 337, 350-52, 77 P.3d 1174 (2003).
Fair market value is defined as what a willing buyer, not required to buy, would
pay a willing seller, not required to sell. State v. Rowley, 74 Wn.2d 328, 334, 444 P.2d
695 (1968). Neither party submitted a professional valuation of fair market value at trial.
Ms. Jones’s evidence focused on the value of a property, not a business, that she believed
was comparable. Mr. Jones’s evidence focused on the impracticability of selling the
business apart from its location. In addition, he presented evidence that the business
generated no net income above what one would have to pay for the labor to run it. The
trial court agreed with Mr. Jones and found that the business had no independent value.
Substantial evidence supports this finding.
2. 648 S. ARTHUR
Mr. Jones contends the trial court erred by finding that 648 S. Arthur was
community property. We agree.
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The characterization of marital property is a mixed question of law and fact. In re
Marriage of Schwarz, 192 Wn. App. 180, 191-92, 368 P.3d 173 (2016). The time and
method of acquisition and intent of the donor are questions of fact, and “whether or not a
rebuttable presumption of community or separate character is overcome is a question of
fact.” Id. at 192. We review factual findings for substantial evidence. Id. The ultimate
classification of property as separate or community is a matter of law, reviewed de novo.
In re Marriage of Martin, 32 Wn. App. 92, 94, 645 P.2d 1148 (1982); In re Marriage of
Chumbley, 150 Wn.2d 1, 5, 74 P.3d 129 (2003).
The first transferred interest
The status of property is determined as of the date of its acquisition. In re
Marriage of Kile, 186 Wn. App. 864, 875, 347 P.3d 894 (2015). Property acquired prior
to marriage is separate property. RCW 26.16.010. Here, Ms. Doss gifted an undivided
one-half interest in 648 S. Arthur to her son before he married. This interest, therefore, is
Mr. Jones’s separate property. The trial court erred by presuming that this interest was
community property.
The second transferred interest
Property acquired during marriage is presumed to be community property,
regardless of how title is held. Dean v. Lehman, 143 Wn.2d 12, 19, 18 P.3d 523 (2001).
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“The burden of rebutting this presumption is on the party challenging the asset’s
community property status, and ‘can be overcome only by clear and convincing proof that
the transaction falls within the scope of a separate property exception.’” Id. at 19-20
(citations omitted) (quoting Estate of Madsen v. Comm’r of Internal Revenue, 97 Wn.2d
792, 796, 650 P.2d 196 (1982), overruled in part on other grounds by Aetna Life Ins. v.
Wadsworth, 102 Wn.2d 652, 659-60, 689 P.2d 46 (1984)).
RCW 26.16.010 sets forth separate property exceptions. That statute provides that
property gifted to one spouse during marriage is separate property. Therefore, if Mr.
Jones can establish by clear and convincing evidence that he received his mother’s
remaining interest in 648 S. Arthur by gift, that interest is his separate property.
Here, the undisputed evidence is that Ms. Doss gifted her remaining interest in 648
S. Arthur. Neither party asserts that consideration was given to Ms. Doss. The only
question is whether the gift was to Mr. Jones, or to both Mr. Jones and Ms. Jones.
Both the quitclaim deed and the excise tax affidavit evidence that Ms. Doss gifted
her remaining interest in the property to her son, not the community. But Ms. Jones,
citing In re Estate of Borghi, 167 Wn.2d 480, 219 P.3d 932 (2009), argues that the name
on the deed or title does not determine the character of the property or even provide much
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evidence of the character of the property. For the reasons we explain below, she reads
Borghi too broadly.
Estate of Borghi
In 1966, the woman later known as Jeanette Borghi began purchasing property on
a real estate contract. Id. at 482. On March 29, 1975, Jeanette and Robert Borghi
married. Id. Three and one-half months later, the contract seller issued a fulfillment deed
in the names of “‘Robert G. & Jeanette L. Borghi, husband and wife.’” Id. Ms. Borghi
later died intestate and litigation ensued as to what rights, if any, Ms. Borghi’s son by a
previous marriage had to the property. Id. at 482-83.
The court first recognized that because Ms. Borghi acquired the property before
she married, it was presumed separate. Id. at 484. It then discussed the joint title gift
presumption. That rule presumes that a spouse quitclaiming separate property to the
spousal community intends to gift the property to the community. In rejecting the joint
title gift presumption, the court explained:
[E]ven when a spouse’s name is included on a deed or title at the direction
of the separate property owner spouse, this does not evidence an intent to
transmute separate property into community property but merely an intent to
put both spouses’ names on the deed or title. There are many reasons it may
make good business sense for spouses to create joint title that have nothing
to do with any intent to create community property. Allowing a
presumption to arise from a change in the form of title inappropriately shifts
attention away from the relevant question of whether a gift of separate
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property to the community is intended and asks instead the irrelevant
question of whether there was an intent to make a conveyance into joint
title.
Id. at 489 (citations omitted). Ultimately, the court determined that the fulfillment
deed, issued by the contract seller three and one-half months after marriage,
provided insufficient evidence to overcome the presumption that the property was
Ms. Borghi’s separate property. Id. at 491.
The facts here are distinguishable from Borghi. There, the question was whether
Ms. Borghi intended to make a gift to the community, when the only evidence was a
fulfillment deed issued by the contract seller in her and her husband’s name soon after
marriage. Here, the parties do not dispute that Ms. Doss intended to gift her remaining
interest in 648 S. Arthur. This uncontested fact, therefore, has been established by clear
and convincing evidence.
The question presented here is to whom the grantor intended to gift her property.
This question was not presented in Borghi. In this regard, the language of the conveyance
has great significance. The conveyance recites that the grantors are Ms. Doss and Mr.
Jones, and the grantee is Mr. Jones.
Again, we distinguish Borghi. There, the only evidence of Ms. Borghi’s intent to
create community property was what the contract seller did. This evidence had little, if
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any, weight. Whereas here, the evidence of Ms. Doss’s intent to gift property to her son
were documents that she herself signed. These documents show that Ms. Doss’s intent
was to gift her remaining interest in the property to Mr. Jones.
The only contrary “evidence” of Ms. Doss’s intent comes from Ms. Jones’s
testimony. She testified that Ms. Doss gifted her interest in the property so the
community could purchase 652 S. Arthur. First, we note the trial court did not give any
weight to Ms. Jones’s testimony about her mother-in-law’s intent. Second, Ms. Jones’s
testimony makes no sense. Any property, separate or community, can serve as collateral
for a community loan. For instance here, there is no evidence that Mr. Jones conveyed
648 S. Arthur to the community for the community to qualify for the 652 S. Arthur loan.
We conclude there is clear and convincing evidence that Ms. Doss gifted her
remaining one-half undivided interest in 648 S. Arthur and that she gifted it to Mr. Jones.
The trial court erred in characterizing this property as community.
3. EQUALIZATION PAYMENT
Ms. Jones contends the trial court erred by denying an equalization payment. She
further argues the court erred by denying her motion to reconsider. We disagree.
RCW 26.09.080 directs the court to consider several factors when distributing
property, including (1) the nature and extent of the community property, (2) the nature
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and extent of the separate property, (3) the duration of the marriage, and (4) the economic
circumstances of the parties at the time of the property division. The distribution need not
be equal, but it must be fair, just, and equitable. In re Marriage of Hadley, 88 Wn.2d
649, 656, 565 P.2d 790 (1977). “Fairness is attained by considering all circumstances of
the marriage and by exercising discretion, not by utilizing inflexible rules.” In re
Marriage of Tower, 55 Wn. App. 697, 700, 780 P.2d 863 (1989). The trial court has
considerable discretion in determining what is just and equitable. In re Marriage of
Doneen, 197 Wn. App. 941, 949, 391 P.3d 594 (2017). Because the trial court is in the
best position to determine what is fair in each case, we reverse only if there has been a
manifest abuse of discretion. Id.; In re Marriage of Brewer, 137 Wn.2d 756, 769, 976
P.2d 102 (1999); In re Marriage of Muhammad, 153 Wn.2d 795, 803, 108 P.3d 779(2005). A manifest abuse of discretion is a decision made on untenable grounds or for
untenable reasons. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
After correctly characterizing 648 S. Arthur as Mr. Jones’s separate property, the
net community property award is $128,346 for Ms. Jones and $98,869 for Mr. Jones.
Because Ms. Jones received a greater portion of the parties’ net community property, she
has no basis to request an equalization payment.
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B. SPOUSAL MAINTENANCE
Mr. Jones contends the trial court erred in granting Ms. Jones’s request for spousal
maintenance after trial. He argues that her income with spousal maintenance is much
higher now than when the temporary award was granted, and he is unfairly left to
shoulder the community debt. Even if true, these are insufficient reasons for us to reverse
the trial court’s maintenance order.
The trial court has discretion in awarding maintenance. In re Marriage of Zahm,
138 Wn.2d 213, 226-27, 978 P.2d 498 (1999). A trial court abuses this discretion
when it does not base its award on a fair consideration of the statutory factors in
RCW 26.09.090. Id.; In re Marriage of Nicholson, 17 Wn. App. 110, 115-16, 561 P.2d
1116 (1977). Those factors include (a) the financial resources of the maintenance-
seeking spouse, including the property awarded and the ability to meet his or her needs,
(b) the time needed to acquire sufficient education or training to find suitable
employment, (c) the standard of living established during the marriage, (d) the duration of
the marriage, (e) the age, physical and emotional condition of the maintenance-seeking
spouse, and (f) the ability of the maintenance-providing spouse to meet his or her
financial obligations while paying maintenance. RCW 26.09.090.
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The court considered and explained the statutory factors in awarding maintenance.
In awarding $2,000 monthly maintenance, the court considered the parties’ needs and
factored in Ms. Jones’s loss of the community business assets. In addition, even though
Ms. Jones has $30,000 more net community assets than Mr. Jones, Mr. Jones has a
significant separate asset, 648 S. Arthur, valued at $225,000. We conclude that the court
did not abuse its discretion in awarding Ms. Jones monthly maintenance of $2,000 for two
years.
C. CHILD SUPPORT DEVIATION
Mr. Jones contends the trial court erred by not granting a deviation in his child
support payments, given the shared parenting plan and the parties’ roughly equal financial
status after incorporating maintenance. We disagree.
We review child support orders for abuse of discretion. In re Marriage of Fiorito,
112 Wn. App. 657, 663, 50 P.3d 298 (2002). We reverse only if the trial court’s decision
was manifestly unreasonable or based on untenable grounds or reasons. Junker, 79
Wn.2d at 26. A decision is manifestly unreasonable if it falls outside the range of
acceptable choices, it is based on untenable grounds if the factual findings are
unsupported by the record, and “it is based on untenable reasons if it is based on an
incorrect standard or the facts do not meet the requirements of the correct standard.”
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In re Marriage of Littlefield, 133 Wn.2d 39, 47, 940 P.2d 1362 (1997). Because the
amount of child support rests in the discretion of the trial court, we will not substitute our
own judgment so long as the trial court considered all of the factors and its decision was
reasonable under the circumstances. Fiorito, 112 Wn. App. at 664. We presume the trial
court considered all the evidence before fashioning the child support order. In re
Parentage of Goude, 152 Wn. App. 784, 791, 219 P.3d 717 (2009). The party
challenging the child support order bears the burden of demonstrating an abuse of
discretion. In re Marriage of Schumacher, 100 Wn. App. 208, 211, 997 P.2d 399 (2000).
Chapter 26.19 RCW establishes a standardized schedule for child support based
primarily on each parent’s share of the total net income. RCW 26.19.071, .080. The
statute was designed to ensure child support orders adequately meet a child’s basic needs
and provide additional support commensurate with the parents’ income, resources, and
standard of living. RCW 26.19.001. The court retains discretion to deviate from the
amounts outlined in the statutory scheme for a nonexclusive list of reasons provided by
RCW 26.19.075. Under the statute, the court may deviate from the standard calculation if
the child spends a significant amount of time with the parent paying support, but may not
deviate on that basis if the result would be insufficient funds in the household receiving
support. RCW 26.19.075(1)(d).
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The court entered a shared parenting plan between the parties, where the children
were to spend equal time at each parent’s home. The court also equalized the parties’
incomes by its maintenance award. Mr. Jones argues the court should have deviated the
child support order under these circumstances. We see no abuse of discretion.
While the trial court had the discretion to deviate, it was not required to do so. The
court considered the parties’ financial situations and the needs of the children, and
explained its allocation of resources in its ruling and again in its order on reconsideration.
We conclude the trial court did not abuse its discretion in denying Mr. Jones’s request for
a deviation in child support.
D. ATTORNEY FEES
Ms. Jones requests this court to award her reasonable attorney fees on appeal. We
decline.
An appellate court has the discretion to grant attorney fees under RCW 26.09.140.
We consider the parties’ relative ability to pay and the merit of the issues on appeal when
granting a request for fees. Muhammad, 153 Wn.2d at 807.
Where applicable law mandates consideration of the financial resources of one or
more parties regarding an award of attorney fees, the party requesting attorney fees must
serve and file a financial affidavit no later than 10 days before the date the case is set for
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consideration on the merits. RAP 18.l(c). Ms. Jones did not comply with this rule. For
this and perhaps other reasons, we deny her request. 3
Affirmed.
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.
j
WE CONCUR:
Fearing, 1:
3
This panel considered the merits of this case on December 9, 2020. On
January 8, 2021, Ms. Jones filed a motion seeking permission to file a late declaration.
By that time, this opinion had been written and approved by the panel. We deny her
motion partly because we see little merit in her fee request. The trial court's decision left
the parties in roughly equal financial positions and neither party substantially prevailed.
20