95
Argued and submitted September 11, 2020, affirmed October 13, 2021, petition
for review denied April 21, 2022 (369 Or 675)
In the Matter of the Marriage of
Catherine Louise EBRIGHT,
Petitioner-Respondent,
and
Arnold Dean EBRIGHT,
Respondent-Appellant,
and
Cheryl Lynn MARTIN,
Third Party Respondent.
Marion County Circuit Court
17DR17475; A169004
499 P3d 841
Husband appeals from a general judgment of dissolution and a supplemental
judgment awarding attorney fees to wife. He argues that the trial court erred
in awarding the value of rental property to husband in the property division,
because he did not have a legally enforceable interest in that property, having
assigned the property to his sister. Held: The evidence in the record supported
the trial court’s finding that the supposed arrangement that husband was only
managing the rental property for his sister, and that he did not have an ownership interest, was a “sham” based on the conduct of husband and his sister over
the approximately 38 years after the assignment and based on its credibility
findings. Based on its findings, the court correctly treated the property as marital property, subject to division.
Affirmed.
Audrey J. Broyles, Judge.
Mark T. McLeod argued the cause for appellant. Also on
the briefs was McLeod & McLeod Attorneys at Law.
Tammy M. Dentinger argued the cause for respondent.
Also on the brief were Elizabeth L. Polay and Garrett
Hemann Robertson PC.
Before Ortega, Presiding Judge, and Shorr, Judge, and
Powers, Judge.
ORTEGA, P. J.
Affirmed.
96 Ebright and Ebright
ORTEGA, P. J.
In this domestic relations case, husband appeals
from the general judgment of dissolution, arguing that
the trial court erred in making the property division that
it did. Husband also appeals from the supplemental judgment awarding attorney fees to wife. We write to address
only husband’s argument that the trial court did not have
authority to dispose of the house on Clark Avenue in the
property division. As explained below, we conclude that
the trial court did have that authority. We reject husband’s
remaining arguments with respect to the property division
and the supplemental judgment for attorney fees without
discussion and affirm.
Husband requests that we take de novo review. We
decline to do so, because this is not an extraordinary case
warranting such review and because the trial court made
credibility findings that it was uniquely positioned to make.
ORAP 5.40(8)(c) - (d). Accordingly, we “review the trial court’s
determination of a ‘just and proper’ property division for an
abuse of discretion. In doing so, we are bound by the trial
court’s express and implicit factual findings if they are supported by any evidence in the record.” Morgan and Morgan,
269 Or App 156, 161,
344 P3d 81, rev den,
357 Or 595 (2015).
Because a lengthy recitation of the facts would not be helpful, we only briefly set out facts necessary to understand our
disposition. It is sufficient to say that all of the trial court’s
express and implied findings of fact were supported by evidence in the record.
This issue in the case centers around a residence on
Clark Avenue (the Clark property) that husband acquired
before his marriage to wife in 1986. Husband and his sister signed an assignment in 1979 that assigned husband’s
interest in his land sale contract and in the real property
to his sister for the consideration of one dollar. His sister
lived in the house for about a year, then moved. At all times,
including during the 31-year marriage to wife, husband paid
all liabilities associated with the Clark property, including
mortgage, taxes, homeowners’ insurance, and repairs, and
received all benefits from the Clark property, including collecting rents and claiming deductions on his and wife’s joint
Cite as 315 Or App 95 (2021) 97
tax returns. Husband’s sister was not involved with any
decisions about the property, and, in 2009, when she lived in
the Clark property for seven months, she paid rent to husband and wife. Husband had told wife that “at one point he
had sold it to [his sister] for one dollar and she lived in it for
a while and then she moved to Portland and gave it back to
him.”
Husband collected and deposited the Clark property rents into a joint account husband shared with wife.
Liabilities were also paid from that account, and wife
assisted husband in managing the property as a rental.
Husband represented himself as the owner of the property to insurance companies, tax authorities, and in eviction proceedings. Husband told wife that she would have
the Clark property on his death and that the property was
part of their retirement planning. After paying off the mortgage to the Clark property in 2003, husband later, in 2006,
received a warranty deed to the property in his name from
the Department of Veterans Affairs, and husband took no
action with respect to it, despite his testimony at trial in
2018 that he would have cleaned up title to his sister if he
could have got the loan off the property. Husband and his
sister claimed in their testimony that husband was only
managing the property for his sister and that his sister
allowed husband to keep all the rents to pay for the house
upkeep and for his management.
The Clark property was valued at $150,000. Husband
and wife also shared a marital home on Dearborn Avenue
(the Dearborn property) that was valued at $200,000.
In the property division, the trial court attributed
the value of the Clark property to husband and awarded
any interest husband or wife holds in the property to husband. The court awarded the Dearborn property to wife,
free and clear of any interest of husband. In short, the trial
court concluded that it did not need to resolve any issue of
legal ownership as between husband and his sister to the
Clark property, and “for purposes of the divorce, the court
determine[d] that it is just and equitable that Husband be
attributed a value for the real property in the amount of
$150,000,” and, “[t]o the extent some court at a later time
98 Ebright and Ebright
may determine that Husband does not have legal ownership
of the property, the court still finds that the property division contained in this judgment is just and equitable.” The
court also found that husband’s and his sister’s explanations
about the arrangement between them with respect to the
Clark property were not credible and found “this arrangement to be a sham; an effort to prevent wife from claiming
an interest in what had always been represented and relied
upon as ‘their’ property.” In awarding the Dearborn property to wife, the trial court further found that husband had
not modified the home to meet his unique needs and that
the court “lacks confidence in husband’s compliance with
any future orders directing disposition of the residence”
and, for that reason, ordered husband to vacate the home
so that wife could sell it. In a supplemental judgment, the
trial court awarded attorney fees to wife in the amount of
$38,559.86.
The division of property in a marital dissolution
case is governed by ORS 107.105(1)(f), which provides, in
part, that “the court may provide in the judgment … [f]or
the division or other disposition between the parties of the
real or personal property, or both, of either or both of the
parties as may be just and proper in all the circumstances.”
“To achieve that [statutory] directive, the statute empowers
the court to distribute any real or personal property that
either or both of the parties hold at the time of dissolution,
including property that the parties had brought into the
marriage.” Kunze and Kunze, 337 Or 122, 133,
92 P3d 100
(2004). The “broad class of property within the court’s dispositional authority [is described] as ‘marital property.’ ”
Id.
Property that is acquired during the marriage is a subset
of marital property that is described as “marital assets,”
and is subject to a rebuttable presumption of equal contribution under ORS 107.105(1)(f).
Id. If the property was
acquired before the marriage, then it is not a marital asset
and “the court considers only what is ‘just and proper in
all the circumstances’ in distributing that property.”
Id. at
134. After considering the nature of the property and relevant statutory considerations, the court’s final inquiry is
what property division is “just and proper in all the circumstances.”
Id. at 135. In determining what is just and proper,
Cite as
315 Or App 95 (2021) 99
the court’s focus is on the equities and includes matters such
as “the preservation of assets; the achievement of economic
self-sufficiency for both spouses; the particular needs of the
parties …; and … the extent to which a party has integrated a separately acquired asset into the common financial affairs of the marital partnership through commingling.” Id. at 135-36.
On appeal, husband argues that the trial court
abused its discretion in assigning to him, for purposes of the
property division, any value from the Clark property, because
neither he nor wife had any enforceable legal interest in the
property. Husband also argues that there was no evidence
that the transfer to his sister was a “sham” as it occurred
several years before the marriage and was not designed to
deprive wife of an interest in the property. Husband argues
that he was simply meeting his duties to maintain the property until it was paid off in the early 2000s. He also argues
that his sister, as the assignee of a contract for the purchase
of land, assumed no liability to take on those duties herself,
citing Kunzman v. Thorsen, 303 Or 600,
740 P2d 754 (1987).
Husband asserts that the trial court had to first determine
that he had a legally enforceable interest in the Clark property before the trial court could treat it as a marital asset.
Here, the trial court determined that the supposed
arrangement that husband was only managing the Clark
property for his sister was a “sham” based on the conduct
of husband and his sister over the approximately 38 years
after the assignment and based on its findings regarding the credibility of their testimony about the supposed
arrangement. The court further found that husband acted
in “an effort to prevent wife from claiming an interest in
what had always been represented and relied upon as ‘their’
property.” There is evidence in the record that supports the
court’s findings of historical fact and we defer to the trial
court’s credibility findings. Johnson and Johnson, 277 Or
App 1, 15 n 2,
370 P3d 526 (2016) (noting that we defer to
a trial court’s express and implied credibility findings).
Having determined that husband’s claim to having no ownership interest in the Clark property was a sham, the court
correctly treated the Clark property as marital property. See
100 Ebright and Ebright
Timm and Timm,
200 Or App 621, 627,
117 P3d 301 (2005)
(rejecting any distinction between sham transfers of marital
assets and sham transfers of marital property and concluding that the trial court correctly, for purposes of division
of marital property, ignored a foreclosure on rental property the husband acquired before the marriage where the
court found the foreclosure was a sham); see also Shelley and
Shelley,
127 Or App 616, 617,
873 P2d 464 (1994) (where payments were made to a third party to reduce assets available
for the property division, the payments were a sham and the
money paid should be included in the property division).
Husband argues that the above reasoning does not
apply, because the assignment to his sister occurred before
the marriage and, because his sister did not assume obligations under the assignment, husband was merely meeting those obligations for all those years. We disagree. The
assignment becomes no less a sham, based on the conduct
of the parties, simply because it has origins before the marriage. Wife testified that husband had mentioned to her that
he assigned the house to his sister for one dollar while she
lived there in 1979, but that after she moved out, she gave it
back to him. Husband’s and his sister’s subsequent actions
over the following 38 years confirmed that intent. And, more
importantly, husband actively treated the Clark property as
his own and as a marital asset for the entire 31 years of his
marriage to wife. Husband’s disclaimer of any ownership
interest in the property, after nearly 38 years of conducting himself as the owner of the property in every conceivable way, supports the court’s conclusion that the supposed
arrangement about which husband and his sister testified—
that husband was only managing the property for his sister
during all that time—was a sham designed to reduce the
amount of property available for division in the dissolution.
It is of no moment for the purposes of this dissolution that
the sham husband sought to perpetuate for purposes of dissolution was based on an earlier assignment made to his
sister in 1979 that both husband and his sister have long
since treated as having no effect. The trial court correctly
concluded that husband has an interest in the Clark property and the exact nature of that interest does not need to be
determined based on the unique circumstances of this case.
Cite as 315 Or App 95 (2021) 101
This is not a speculative interest; at a minimum, husband
holds a warranty deed to the property and there is no evidence in the record of any consideration that his sister gave
for the supposed assignment to her of the property. The trial
court correctly considered the Clark property to be marital
property subject to division under ORS 107.105(1)(f).
In addition, with respect to how the court treated
the Clark property in the property division, “acts of commingling may convert a separately acquired asset into a
joint asset of the marital partnership.” Van Winkel and Van
Winkel, 289 Or App 805, 811,
412 P3d 243, rev den,
363 Or
224 (2018). Whether commingling has occurred depends
on intent, which, “in turn, depends not on what the spouse
might privately contemplate or publicly declare, but how the
spouse acts, that is, what the spouse’s treatment of the asset
demonstrates.” Id. (emphasis in original; citing Lind and
Lind,
207 Or App 56, 67,
139 P3d 1032 (2006)). “[T]he court
must evaluate the extent to which a spouse has integrated a
separately acquired asset into the joint finances of the marital partnership and also evaluate whether any inequity
would result from the award of that asset to that spouse as
separate property.” Kunze,
337 Or at 142. Here, in attributing the entire value of the Clark property to husband as
a value to balance in the property division, the court correctly considered the extensive and lengthy commingling of
the Clark property in husband’s and wife’s joint finances, as
well as other equitable considerations. See, e.g., Tsukamaki
and Tsukamaki,
199 Or App 577, 586,
112 P3d 416 (2005)
(“In some cases, a particular asset may be commingled to
such an extent that it would be inequitable to divide it in
any manner other than equally.”). Moreover, husband does
not assert any argument on appeal that, if the Clark property was subject to consideration by the court in the property division, the court should have made a different consideration of it. Under the unique circumstances presented
here, the trial court did not abuse its discretion in making
the property division that it did.
Affirmed.
