In re the Marriage of Wright
In re the Marriage of Wright
Opinion of the Court
¶1 — Dr. Kim Wright appeals the property distribution and maintenance order in the dissolution of his 30-plus year marriage to Mary Wright. We conclude that (1) the property distribution was within the trial court’s discretion, (2) ample evidence supports the trial court’s determination of the date the Wrights separated, (3) the trial court correctly applied Washington law in valuing the surgical practice’s goodwill and soundly exercised its discretion in distributing the Wrights’ community interest in the practice, (4) Dr. Wright waived the issue of whether certain assets were his separate property, and (5) the award of spousal maintenance was an appropriate exercise of the trial court’s discretion. We affirm the trial court’s property distribution and provision of maintenance, and deny Dr. Wright’s request for attorney fees on appeal.
FACTS
¶2 Ms. Wright petitioned for dissolution in April 2011. The issues before the trial court were child support, spousal
¶3 The court awarded Ms. Wright $8,526,834 in community property, a $1.7 million equalizing payment, and $1 million in spousal maintenance spread over three years. The court awarded Dr. Wright $8,657,042 in community property and $979,966 in separate property, less the $1.7 million equalizing payment. The court determined that Dr. Wright would work for a minimum of 2.5 years after the dissolution and earn a minimum of $4 million annually.
¶4 Dr. Wright appeals.
ANALYSIS
¶5 A trial court in dissolution proceedings has broad discretion to make a just and equitable distribution of property based on the factors enumerated in RCW 26.09-.080.
Property Distribution: Roughly Equal Positions
¶6 Dr. Wright first contends that the trial court abused its discretion because its property distribution did not leave the parties in “roughly equal” positions. This is so, Dr. Wright argues, because Ms. Wright received more tangible and liquid assets, on the basis that Dr. Wright would earn at least $10 million postdissolution. Dr. Wright fails to demonstrate that the trial court abused its discretion.
¶7 A trial court is not required to place the parties in precisely equal financial positions at the moment of dissolution.
¶8 Rockwell supports the trial court’s property division in this case. Dr. Wright argues the court awarded property valued at $8,657,042 to Dr. Wright and $8,526,834 to Ms.
¶9 Dr. Wright’s assertion that the property division was unfair because Ms. Wright received more of the “tangible” and “liquid” assets than he did is not persuasive. Dr. Wright expressly requested certain high-value items with a combined net value of $7.75 million, including four airplanes, the surgical practice, and investment and real property acquired after he moved to Alaska. The trial court’s property division accommodated his requests. It was entirely reasonable for the trial court to award Ms. Wright the assets it did in order to make the division just and equitable. Dr. Wright fails to persuasively demonstrate that this was an abuse of discretion.
Separate Property
¶10 Dr. Wright contends that the trial court improperly invaded his separate property in awarding the $1.7 million equalizing payment because the award necessarily included his future earnings. To support this contention, he cites to Holm v. Holm, a case decided under Remington’s Revised Statutes § 989.
¶11 Dr. Wright also asserts that the trial court erred in distributing separate property consisting of the practice’s accounts receivable for services provided after Ms. Wright filed for dissolution. However, Dr. Wright failed to claim these assets as his separate property at trial, even when the trial court directly asked Dr. Wright’s counsel to list his separate property. The trial court’s duty to characterize a particular asset as community or separate property only arises where the issue is presented at trial.
Distribution of Alaska Surgical Practice
¶12 Dr. Wright argues that the trial court erred in distributing the goodwill of his Alaska surgical practice. He contends that the practice had no value because it was not “saleable” under Alaska law. Under Alaska law, goodwill
¶13 Where there is a conflict of laws, the court determines which state’s law to apply by evaluating which jurisdiction has the “most significant relationship” to a given issue.
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
¶14 Here, the trial court considered those factors and determined that Washington law should apply. The trial
¶15 Dr. Wright fails to persuasively demonstrate that the trial court abused its discretion in considering the surgery practice’s goodwill as an asset in calculating Dr. Wright’s award. The trial court’s determination of the goodwill value was supported at trial by the testimony of financial experts. Ms. Wright’s expert, certified public accountant Kevin Grambush, testified that Dr. Wright’s neurosurgery practice was worth $8.4 million and, of that, “[t]he tangible assets are $1,105,042, and the goodwill value is $7,294,958.”
¶16 Dr. Wright argues that Ms. Wright had no financial expectation that the goodwill would be treated as an asset because she should have assumed that Alaska law would apply. But it was entirely reasonable for the trial court to conclude that Ms. Wright had a legitimate expectation to receive her community property share of the goodwill based
¶17 Dr. Wright also contends the trial court erred by concluding that the marriage was irretrievably broken in April 2011, when Ms. Wright filed for divorce. He argues that his business investments, comprised of money he earned before that date but while the couple were living separate and apart, are his separate property. Neither argument is persuasive.
¶18 The trial court’s finding that the marital community was intact until April 2011 is supported by sufficient evidence. The record demonstrates that (1) Dr. Wright moved to Alaska in November 2007, when the parties’ youngest children were still in middle school or high school, and it “really was never the plan” for the family to move with him;
¶19 In Washington, when married individuals live separate and apart from one another, their respective earnings and accumulations while apart are regarded as “the separate property of each.”
¶20 Dr. Wright also argues that the trial court erred in making him solely responsible for liability from a pending medical malpractice action, citing Dizard & Getty v. Damson.
¶21 The trial court’s distribution of these assets was reasonable, supported by both correct conclusions of applicable law and findings of fact supported by the evidentiary record.
¶22 Dr. Wright contends that the trial court abused its discretion by awarding maintenance because Ms. Wright did not demonstrate financial need in light of the other provisions included in her award. Because financial need is not a prerequisite to a maintenance award, Dr. Wright’s argument is unpersuasive.
¶23 The only limitation on the amount and duration of maintenance under RCW 26.09.090 is that the award must be “just.”
¶24 Citing In re Marriage of Rink,
¶26 Dr. Wright does not demonstrate that the maintenance award was an abuse of the trial court’s discretion.
Attorney Fees
¶27 Dr. Wright seeks attorney fees and costs under RCW 26.09.140. This court may award attorney fees after considering the relative resources of the parties and the merits of the appeal.
¶28 Affirmed.
Reconsideration denied February 3, 2014.
Review denied at 180 Wn.2d 1016, 1019 (2014).
The Wrights had eight children together, seven of whom were emancipated adults by the time of the May 2012 trial.
Dr. Wright does not appeal from the value the court assigned to the family home, the only asset value the parties did not stipulate to before trial.
Under RCW 26.09.080, the trial court is to make a distribution of property that is just and equitable after consideration of all relevant factors, including but not limited to (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 property is to become effective.
In re Marriage of Konzen, 103 Wn.2d 470, 477-78, 693 P.2d 97 (1985); In re Marriage of Irwin, 64 Wn. App. 38, 48, 822 P.2d 797 (1992).
In re Marriage of Brewer, 137 Wn.2d 756, 769, 976 P.2d 102 (1999) (trial court is in the best position to determine what is fair under the circumstances); In re Marriage of Buchanan, 150 Wn. App. 730, 735, 207 P.3d 478 (2009).
In re Marriage of Littlefield, 133 Wn.2d 39, 46-47, 940 P.2d 1362 (1997).
In re Marriage of Thomas, 63 Wn. App. 658, 660, 821 P.2d 1227 (1991). An appellate court should “not substitute [its] judgment for the trial court’s, weigh the evidence, or adjudge witness credibility.” In re Marriage of Greene, 97 Wn. App. 708, 714, 986 P.2d 144 (1999).
In re Marriage of White, 105 Wn. App. 545, 549, 20 P.3d 481 (2001).
In re Marriage of Rockwell, 141 Wn. App. 235, 243, 170 P.3d 572 (2007).
141 Wn. App. 235, 248-49, 170 P.3d 572 (2007).
27 Wn.2d 456, 465, 178 P.2d 725 (1947).
178 Wn. App. 133, 313 P.3d 1228 (2013).
103 Wn.2d 470, 693 P.2d 97 (1985).
Larson, 178 Wn. App. 143.
RCW 26.09.080; 20 Kenneth W. Weber, Washington Practice: Family and Community Property Law § 32.9, at 175 (1997).
See RAP 2.5(a) (“The appellate court may refuse to review any claim of error which was not raised in the trial court.”); see also In re Marriage of Griswold, 112 Wn. App. 333, 349 n.7, 48 P.3d 1018 (2002).
Moffitt v. Moffitt, 749 P.2d 343, 347 (Alaska 1988) (“If the trial court determines either that no good will exists or that the good will is unmarketable, then no value for good will should be considered in dividing the marital assets.”); see also Miles v. Miles, 816 P.2d 129, 131 (Alaska 1991); Fortson v. Fortson, 131 P.3d 451, 460 (Alaska 2006) (wife’s dermatology “clinic’s unmarketability made it unnecessary to determine the value of the clinic’s goodwill”).
Seizer v. Sessions, 132 Wn.2d 642, 650, 940 P.2d 261 (1997).
In Seizer, our Supreme Court adopted Restatement (Second) Conflict of Laws § 258 (1971), which explains that the most significant relationship is determined under the principles stated in § 6. Section 258 further clarifies the relative weight given to these factors: “In the absence of an effective choice of law by the spouses, greater weight will usually be given to the state where the spouses were domiciled at the time the [property] was acquired than to any other contact in determining the state of the applicable law.” Comment a to § 258 states that “[t]he rule applies to chattels, to rights embodied in a document and to rights that are not embodied in a document.” In In re Marriage of Landry, 103 Wn.2d 807, 810, 699 P.2d 214 (1985), this rule was applied to a spouse’s military pension. Dr. Wright does not dispute the applicability of Restatement (Second) Conflict of Laws § 258 to the goodwill of his Alaska business but challenges the trial court’s analysis of those factors.
Clerk’s Papers at 253.
Report of Proceedings (RP) (May 29, 2012) at 71. Grambush also addressed and criticized the approach undertaken by Dr. Wright’s expert’s valuation of the practice.
RP (May 31, 2012) at 590.
RCW 26.16.140.
Kerr v. Cochran, 65 Wn.2d 211, 224, 396 P.2d 642 (1964).
In re Marriage of Nuss, 65 Wn. App. 334, 344, 828 P.2d 627 (1992).
See Seizer, 132 Wn.2d at 654 (“If the [separate and apart] statute does not apply because the marriage is not defunct, [the wife] would then be entitled to her community property share of the [asset].”).
63 Wn.2d 526, 387 P.2d 964 (1964). In Dizard, the husband was responsible for the community business while the dissolution was pending. The community accumulated debts for which creditors sought payment after the marriage was dissolved. The wife sought to avoid liability, claiming that the marriage was defunct when the liabilities accrued. The Supreme Court held that “it is inconceivable that respondent may authorize the husband to carry on the community business, create a potential source of assets, ultimately share in these assets, and yet be immune from the claims of creditors who contribute to the accumulations, if any.” Dizard, 63 Wn.2d at 530.
In re Marriage of Bulicek, 59 Wn. App. 630, 633, 800 P.2d 394 (1990).
In re Marriage of Washburn, 101 Wn.2d 168, 179, 677 P.2d 152 (1984).
18 Wn. App. 549, 571 P.2d 210 (1977).
In re Marriage of Washburn, 101 Wn.2d 168, 677 P.2d 152 (1984).
RCW 26.09.140; In re Marriage of Leslie, 90 Wn. App. 796, 807, 954 P.2d 330 (1998).
Reference
- Full Case Name
- In the Matter of the Marriage of Mary M. Wright, and Kim B. Wright
- Cited By
- 55 cases
- Status
- Published