Miles v. Miles

RABINO WITZ, Chief Justice,

dissenting in part.

I disagree with the court’s determination in Part IV that the down payment on the Florida condominium was' William’s separate property.

The key issue is whether the parties intended the $19,773 to become joint marital property or to remain separate property. Matson v. Lewis, 755 P.2d 1126, 1127 & n. 2 (Alaska 1988); Moffttt v. Moffitt, 749 P.2d 343, 346-47 (Alaska 1988); Burgess v. Burgess, 710 P.2d 417, 420 (Alaska 1985); Wanberg v. Wanberg, 664 P.2d 568, 571-72 (Alaska 1983).

It is true that parties may, by their actions during marriage, demonstrate intent to treat specific property as joint holdings even though they were acquired by one spouse prior to marriage. Wanberg, 664 P.2d at 571. Where such intent is established, usually through joint management and control of the property, a court will consider the property to be a marital asset. Id. However, the act of commingling, in itself, does not automatically establish intent to jointly hold property, and a court always should consider the property’s source when determining what assets are available for distribution.

Carlson v. Carlson, 722 P.2d 222, 224 (Alaska 1986) (emphasis added).¹

Here, the record indicates that the parties intended the $19,773 to be part of the marital estate. As the court acknowledges, the superior court treated the condominium as a joint holding, based on more than a commingling of assets: “The record shows that the parties established an intent to hold the property jointly. Cynthia and William held title to the condominium and both were obligors on the note. During the marriage, they visited the condominium several times each year and both worked to repair and improve it.” Supra, at 132 n. 2.

In contrast to the court, I find Matson indistinguishable. In both cases, the property was taken jointly. The only distinguishing feature is that in Matson, the monthly payments were clearly made from marital assets. This distinction is not controlling; here, there simply is no explicit evidence as to the source of the monthly payments.² More importantly, in Matson the lots were unimproved; there was no indication that the parties worked together to improve them. Yet here, both William and Cynthia made repairs and improvements to the condominium. On this record, I would hold that the superior court abused its discretion in “backing-down” the $19,-773 down payment and in failing to classify this amount as marital property.³

1 . In Carlson, we found a four-plex purchased during the marriage to be marital property, although the down payment came from the husband’s separate property. The parties lived in one unit and the wife helped manage the rental units. Also, a lot purchased before the marriage was considered marital property because the wife had power of attorney to sign the purchase papers and title was taken jointly. An improved lot in Michigan was considered separate property, on the other hand, because the husband bought it and improved it before the marriage. There was no intent to jointly hold that property.

2 . The majority opinion states, “The trial court found that William had made the down payment on the Florida condominium from premarital assets and subsequently made all mortgage payments from his separate funds.” Supra, at 132. (Footnote omitted.) However, on the question of the subsequent mortgage payments, the superior court actually stated that “Bill paid all of the holding costs associated with the Florida condominium from the date of separation through the end of September 1988, at which time he then begin [sic] to occupy the condominium.” It was Bill’s Statement of the Evidence that indicated that he made payments on that property every month. Yet, even his Statement of the Evidence does not say when those payments began or from which account those payments were drawn. Cynthia, in fact, contends they both made payments. As to the downpayment itself, Cynthia testified that she always considered that they had bought the Florida condominium together; she never knew what source was used for the down payment.

3 . William claims that a reclassification will not make a difference because the superior court deducted the $19,773 when it awarded William his separate portion of the bank account from which this money was drawn. He believes that under Cynthia’s formula, the superior court would have to deduct the down payment from the marital portion of that account, leaving each party with the same net proceeds. However, William overlooks the explicit finding by the superior court that the down payment for the condominium came out of his separate portion of the "four plex account.” Given the superior court’s ruling that the down payment came from William's separate funds, a correct distribution would have made a difference. The court should have divided the total equity in the condominium equally while still deducting the down payment from William’s separate property-