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DO NOT CITE. SEE GR 14.1(a).
Court of Appeals Division I
State of Washington
Opinion Information Sheet
| Docket Number: |
66246-5 |
| Title of Case: |
In Re The Marriage Of: Lisa Tegrotenhuis, Appellant V. David Tegrotenhuis, Respondent |
| File Date: |
05/29/2012 |
SOURCE OF APPEAL
----------------
| Appeal from San Juan Superior Court |
| Docket No: | 09-3-05027-3 |
| Judgment or order under review |
| Date filed: | 10/29/2010 |
| Judge signing: | Honorable Donald E. Eaton |
JUDGES
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| Authored by | C. Kenneth Grosse |
| Concurring: | J. Robert Leach |
| Anne Ellington |
COUNSEL OF RECORD
-----------------
Counsel for Appellant(s) |
| | Stephen a Brandli |
| | Brandli Law PLLC |
| | 1 Front St Ste D2 |
| | Po Box 850 |
| | Friday Harbor, WA, 98250-0850 |
Counsel for Respondent(s) |
| | Catherine Wright Smith |
| | Smith Goodfriend PS |
| | 1109 1st Ave Ste 500 |
| | Seattle, WA, 98101-2988 |
|
| | Douglas Allen Saar |
| | Law Office of Skinner & Saar PS |
| | 791 Se Barrington Dr |
| | Oak Harbor, WA, 98277-3278 |
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
In the Matter of the Marriage of )
) No. 66246-5-I
LISA LYNN TEGROTENHUIS, )
) DIVISION ONE
Appellant, )
) UNPUBLISHED OPINION
and )
)
DAVID ALAN TEGROTENHUIS, )
)
Respondent. ) FILED: May 29, 2012
Grosse, J. -- The goal of property division in a dissolution action is a just
and equitable distribution of the parties' property and liabilities. The trial court's
order distributing property is reviewed for an abuse of discretion, and will only be
reversed if there is a manifest abuse of that discretion. A trial court does not
abuse its discretion when substantial evidence supports its division of the
property. Here, the trial court correctly interpreted the prenuptial agreement
according to Michigan law and did not abuse its discretion in awarding a
disproportionate share of the community property under Washington law,
particularly here where the husband's separate property was the source for all of
the marital estate. Accordingly, we affirm the trial court.
FACTS
After obtaining a dental assistant certificate in 1990, Lisa Hill was
employed by David TeGrotenhuis at his newly formed dental group in Ann Arbor,
Michigan, where she earned $12 to $13 an hour. Within a month of her
No. 66246-5-I / 2
employment, Hill began dating TeGrotenhuis. TeGrotenhuis was going through
a divorce at the time. Hill was also married and obtained a divorce in 1992.
In the fall of 1992, Hill moved in with TeGrotenhuis in his home in Howell,
Michigan. She soon began to care for the home and worked less at the dental
practice. Hill enrolled in school full time in 1993 and obtained a bachelor of
science in geology.
While on vacation in Alaska, the parties purchased property in Homer,
Alaska. Hill testified that she contributed $10,000 that she had received as a gift
from TeGrotenhuis's father. The parties entered into a prenuptial agreement on
December 24, 1997. Hill objected to the characterization of the Alaska property
as TeGrotenhuis's separate property and the Agreement was altered to provide
that Hill would receive the property after 15 years if they remained married. Hill
and TeGrotenhuis were married on December 31, 1997, in Banff, Canada.
In 1998, while vacationing in San Juan County, Washington, the parties
fell in love with the area. Between 1999 and 2005, the parties made a series of
real estate purchases on San Juan Island.
In 2004, Hill moved to San Juan Island and TeGrotenhuis planned to
follow as soon as he sold his dental practice. TeGrotenhuis was not able to sell
the practice until 2009, when he finally moved to Washington. A few months
later, on June 2, 2009, Hill petitioned for dissolution of the marriage.
On November 20, 2009, the court entered a temporary order awarding Hill
$2,500 monthly spousal maintenance and $5,000 in temporary attorney fees.
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No. 66246-5-I / 3
On March 12, the spousal maintenance was increased to $3,500. The court also
awarded proceeds from the property sold, including $20,000 towards Hill's
attorney fees.
In addition to the property owned in Washington, the parties owned one
parcel of real estate in Montana and TeGrotenhuis owned his residential
property in Michigan. The court valued all of their assets over $7,000,000 with
debts exceeding $4,000,000.
The trial court viewed the Washington properties still owned by the
parties as mixed in character -- presumptively community, but having a separate
property interest:
Mount Dallas: Purchased for $507,264.14 with community debt of $250,000 and
the remainder of the purchase price paid with TeGrotenhuis's separate funds.
Thus, the court found the property to be 50 percent separate and 50 percent
community.
The property was subdivided to a 10-acre parcel with a value of $350,000 and a
14-acre parcel with a value of $700,000. Both parcels are subject to a mortgage
owing of $474,000.
702 San Juan Drive: Purchased for $617,652.18 using $420,000 in community
funded loan with the remainder of the purchase price being paid through
TeGrotenhuis's separate property. The court characterized the property as 32
percent separate and 68 percent community.
Present value of $2,200,000 subject to a mortgage owing of $916,000.
80 First Street: Purchased for $1,241,000 with a loan of $775,000 in community
funds the remainder of purchase price was paid with TeGrotenhuis's separate
funds, making the property 64 percent TeGrotenhuis's separate property and 36
percent community property.
Present value of $1,090,000 and subject to mortgage of $690,000.
80 Nichols Walk: Purchased in 2005 for $292,016.25 with $145,000 in
community funds, with the remainder purchased from TeGrotenhuis's separate
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No. 66246-5-I / 4
property, making the property 50 percent separate and 50 percent community.
Present Value: $345,000 subject to a mortgage of $131,000.
The trial court awarded each party their separate property in accordance
with the prenuptial agreement and awarded the Mount Dallas property to Hill,
and the other three properties to TeGrotenhuis. The Yacht Haven property
which had been sold and held in trust during the dissolution was distributed to
the parties. Hill appeals arguing the trial court misapplied the prenuptial
agreement when it characterized the Washington property as mixed.
ANALYSIS
The parties entered into a prenuptial agreement (Agreement) which was
to be interpreted in accordance with Michigan law. Neither party challenges the
validity of the prenuptial agreement. Thus, the characterization of property at
the time of the agreement is not at issue. Paragraphs 1 and 2 of the Agreement
set forth the separate property of each and provide that the property described
therein, "including any proceeds from the sale and disposition thereof, or any
income earned therefrom . . ., shall be deemed as the sole and separate
property of [Hill or TeGrotenhuis] for all purposes under this agreement."
Paragraph 3 provides that any property not inventoried shall be
considered marital property. In the event of a divorce, paragraph 6 provides that
neither party would have any right to the separate property of the opposite party,
except as provided:
[Paragraph 13] Joint Assets. Any assets acquired in joint names
shall become the property of the survivor on the death of a party. If
the marriage is terminated by divorce, each party shall be entitled
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No. 66246-5-I / 5
to one-half (1/2) the value of any joint assets after settlement of all
joint liabilities.
The trial court determined that paragraph 13 of the prenuptial agreement
pertained only to property that was titled as joint tenants and not to "marital
property." The trial court found that the assets were "marital property" under
Michigan law and presumptively community property in Washington.1
Under Michigan law, the distribution of property in a divorce is controlled
by statute.2 "In dividing marital assets, the goal is to reach an equitable division
in light of all the circumstances."3 In a divorce proceeding, the court may divide
all property acquired "'by reason of the marriage.'"4 In Michigan, the trial court's
first step in the division of property is to determine which assets are included in
the marital estate and which are separate property.5 The marital property is
generally divided between the parties, with each party taking away their own
separate estate with no invasion by the other.6
Hill argues that the term "joint assets" used in paragraph 13 of the
Agreement necessarily means that all of the real property that is in both parties'
names should be divided equally. But, the "mere fact that property may be held
jointly or individually is not necessarily dispositive of whether the property is
1 See In re Marriage of Gillespie, 89 Wn. App. 390, 400, 948 P.2d 1338 (1997)
(a party is required to rebut the presumption that the property acquired during
marriage is something other than community property).
2 Reeves v. Reeves, 226 Mich. App. 490, 493, 575 N.W.2d 1, 2 (1997) (citing
M.C.L. § 552.1 et seq.).
3 McNamara v. Horner, 249 Mich. App. 177, 188, 642 N.W.2d 385 (2002).
4 Reeves, 575 N.W.2d at 2 (emphasis omitted) (quoting M.C.L. § 552.19).
5 Reed v. Reed, 265 Mich. App. 131, 150, 693 N.W.2d 825 (2005) (quoting
Reeves, 575 N.W.2d at 3).
6 Reeves, 575 N.W.2d at 3.
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No. 66246-5-I / 6
classified as separate or marital."7 The trial court's conclusion that the term
"joint assets" did not mean any asset titled in both parties' names was correct.
Such an interpretation is in accord with the intent of the parties. The prenuptial
agreement was devised to protect separate property and the proceeds
therefrom.
When the parties entered the agreement, TeGrotenhuis had separate
property valued at over $2.75 million, while Hill's separate property had a
negative $4,000 value. After the dissolution, Hill's property had a net value
close to $750,000, while TeGrotenhuis net value was slightly less than $2.5
million, an amount less than that with which he entered the marriage.
The court reviews an order distributing property for an abuse of
discretion, and will only reverse a trial court's decision if there is a manifest
abuse of discretion.8 In a dissolution action, all property, community and
separate, is before the court for distribution.9 The relevant factors in determining
a just and equitable distribution of property are provided by statute and include:
"(1) [t]he nature and extent of the community property; (2) [t]he nature and extent
of the separate property; (3) [t]he duration of the marriage . . .; and (4) [t]he
economic circumstances of each spouse . . . at the time the division of property
is to become effective."1
7 Cunningham v Cunningham, 289 Mich. App. 195, 201-02, 795 N.W.2d 826,
830 (2010).
8 In re Littlefield, 133 Wn.2d 39, 940 P.2d 1362 (1997).
9 In re Marriage of Stachofsky, 90 Wn. App. 135, 142, 951 P.2d 346 (1998).
1 RCW 26.09.080; In re Marriage of Olivares, 69 Wn. App. 324, 330, 848 P.2d
1281 (1993); In re Marriage of DewBerry, 115 Wn. App. 351, 62 P.3d 525
(2003).
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No. 66246-5-I / 7
The trial court's findings reflect that it considered all of the factors in RCW
26.09.080, including the nature and extent of all property before it, community
and separate alike. Washington courts have upheld property distribution of a
greater portion of a total estate to a spouse who has greater separate property,
as was the case here.11
Here, the court applied Washington law in a manner consistent with the
intentions of the parties as expressed in the Agreement. The court found clear
evidence that TeGrotenhuis's separate property proceeds were used as part
payment of the purchase price for all of the Washington real property. Where
the trial court found the evidence to be unclear regarding proceeds used to
make improvements, it did award separate credit for those monies,
characterizing them as community.
Hill does not dispute the valuation of the properties or the indebtedness
attached thereto. Hill challenges the weight of the evidence used to establish
TeGrotenhuis's separate property interest in the various properties, but presents
no evidence to refute the court's calculations. Hill alludes to the efforts she
expended to remodel and oversee the construction projects on the various
properties. But the court considered those contributions in its award specifically
stating that it recognized both her efforts in overseeing the construction and
remodel of the properties.
Hill argues that she is entitled to an equitable right of reimbursement for
11 See, e.g., In re Marriage of Brewer, 137 Wn.2d 756, 976 P.2d 102 (1999);
DewBerry, 115 Wn. App. 351.
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No. 66246-5-I / 8
the repayment of the construction loan for the house on 702 San Juan Drive that
was awarded to TeGrotenhuis. She does not dispute the characterization of the
property as 68 percent community and 32 percent TeGrotenhuis's separate
property. Rather, she argues that the $1 million loan was community property
expended to improve the entire property and since that loan improved 32
percent of TeGrotenhuis's separate property she should be entitled to
reimbursement of $320,000. This simply fails to take into consideration that
there is still a $916,000 loan outstanding on the property.
Hill's award of the Mount Dallas property gave her equity of approximately
$600,000. TeGrotenhuis's equity in the remaining three Washington properties
gave him equity of $1,898,000. Additionally, TeGrotenhuis was also awarded
the Montana and Michigan properties, which have a negative equity value over
$200,000.12 TeGrotenhuis's separate property contribution to the Washington
properties totaled $1,062,000.
Additionally, the Yacht Haven property which was sold before the
proceeding took place had remaining funds of $379,000, of which the court
awarded $120,000 to Hill.
The dispositive ruling by the trial court was fair and equitable under the
fact and circumstances of the case. Accordingly, we affirm.
12 The Montana and Michigan properties both had outstanding debts.
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No. 66246-5-I / 9
WE CONCUR:
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