697 A.2d 1254
Supreme Judicial Court of Maine.Argued May 12, 1997.
Decided June 24, 1997.
Appeal from the Supreme Judicial Court, Dana, J.
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[EDITORS’ NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]Page 1256
Peter L. Murray (orally), Law Office of Peter L. Murray, Michael D. Traister, Ann M. Courtney, Murray, Plumb Murray, Portland, for plaintiff.
John A. Graustein (orally), Deirdre M. Smith, Drummond, Woodsum MacMahon, Portland, for defendant.
Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, DANA, and RUDMAN, JJ.
DANA, Justice.
[¶ 1] Carol Peters appeals from a judgment entered in the Superior Court (Cumberland County, MacNichol, J.) granting her a divorce from Donald Peters. Carol contends that the court abused its discretion when it denied her motion for further findings of fact, distributed the marital property, awarded alimony, and refused to award Carol her attorney fees, and that it erred when it found that Donald did not violate the preliminary injunction imposed pursuant to 19 M.R.S.A. § 692-A(1)(B)(1) (Supp. 1996). We affirm the judgment.
[¶ 2] Donald and Carol Peters were married in 1961. Carol stayed at home to care for their two children while Donald built a real estate construction and development business. In 1968, Donald incorporated his business as Donalco, Inc., and it thrived. He acquired several investment properties in and around Portland, some of which he used for rental units. In the mid 1980s, Donald and two other individuals created another corporation, Ariel Corporation, and started doing development work in the Augusta area. Donald also developed partnership interests in two housing projects known as “North School housing” and “Stratford County housing,” and created Main Street Autos, which owns a collection of vehicles. Donald boughtPage 1257
two parcels of land in Eustis and built a house there. At the time of the divorce, Donald owned several rental properties in Portland. Donalco also owned property, but according to Donald’s testimony at the divorce hearing, the business was suffering due to the economic downturn of the late 1980s and early 1990s. At the time of the divorce, Donalco did not have the credit, equipment, or employees to enable the company to bid on construction jobs.
[¶ 3] Donald recently acquired a $225,000 home equity loan from Fleet Bank and has been using the money to maintain the rental properties and pay his own living expenses. His 1994 tax return reflects a net taxable income of $20,284. [¶ 4] The parties obtained a divorce in 1979 but remarried nine months later. They separated again in 1985 and Carol moved to Florida. Donald bought the condominium that Carol was renting and later bought another condominium on Key Biscayne. While Carol was living in Florida, Donald paid all of her expenses. He sent her $450 per week, and on the last week of every month sent her a check for $1400. He also provided her with a credit card and medical insurance. Donald stopped sending money to Carol after she filed for the divorce, asserting that he had run out of money; the last three or four checks that he sent to her came out of the funds from his home equity loan. [¶ 5] Donald made several property transfers after Carol filed for divorce. He transferred the Eustis property to their son in October 1994, ostensibly to avoid the reach of creditors. The gift tax return stated that the property’s value was $217,000. Donald testified that he sent a copy of the conveyance to Carol prior to the transfer and when she did not respond he completed the transfer. In June 1995 Donald sold one of the rental properties on Carleton Street in Portland for $150,000, and another unit on Harrison Street for $75,000. According to Donald, Fleet Bank requested that he sell those properties and apply the proceeds to the mortgages. At the time, Donald was trying to get a line of credit from Fleet Bank. [¶ 6] At the divorce hearing, Carol presented a personal financial statement dated June 1995 that Donald submitted to Fleet Bank in his attempt to obtain financing. The statement included values for Donald’s assets including real estate, stocks, accounts, notes receivable, life insurance, and personal property, and also listed his liabilities. Some of the values provided in the statement were based on Donald’s own estimates while others were based on prior appraisals. According to Donald, he prepared the statement himself without the aid of an accountant because Fleet Bank told him it needed a statement as a formality and was going to independently appraise the property. Donald testified that the statement “was a very optimistic, hopeful, desperate attempt to keep financing going.” [¶ 7] Donald presented a somewhat different financial picture at the divorce hearing than that portrayed by the financial statement submitted to the bank. According to his testimony, Donalco is not operating and he is currently using the proceeds of the home equity loan for his living expenses. The notes payable from several of his business interests, such as a $900,000 note from Ariel Corporation, are worthless because the businesses are insolvent and unable to make payments. He also testified that his partnership interests in the housing projects are worth nothing. All of his personal real estate except the two condominiums in Florida and the property in Eustis is mortgaged and cross-collateralized to Fleet Bank. Donald is personally liable for one-third of Ariel Corporation’s debt. He submitted tax returns and financial statements indicating that Ariel Corporation’s investments are also not doing well. All of the income from the rental units goes to pay the mortgages and he subsidizes their operation with the proceeds from his home equity loan. Donald testified at length about the values on his June 1995 personal financial statement. He stated that many of the properties for which he provided different values at the hearing had been reappraised by Fleet after he submitted the statement. [¶ 8] Carol argued at the hearing that the court should make her and Donald co-owners of all of the marital property, but the court divided the marital property as follows: CarolPage 1258
received the unencumbered condo in Florida in which she lives, and half of the interest in the Eustis property. Donald received everything else and all the marital debts. The court awarded Carol the Key Biscayne condo, worth about $100,000, as lump sum alimony, along with $1 per year as periodic alimony. The court declined to order Donald to pay Carol’s attorney fees amounting to over $40,000.
I.
[¶ 9] Carol contends the trial court’s judgment lacks findings sufficient for effective review because the court failed to make specific findings regarding marital net worth, the values of certain assets, and the parties’ entitlements to various assets, and that the court abused its discretion when it denied her motion for further findings of fact and conclusions of law.
Furthermore, Carol’s motion for further findings of fact did not seek specific findings on any particular issue;[2] given the court’s extensive findings provided in its judgment and Carol’s failure to assert that the judgment was inadequate on any particular issue, the court acted within its discretion by denying her motion.
II.
[¶ 13] Carol contends that the court failed to value accurately the marital property. She asserts that the court should have relied on Donald’s personal financial statement submitted to Fleet Bank in June 1995 rather than on Donald’s testimony during the hearing.
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property at the divorce hearing. Donald was competent to testify about the value of his property, see Simmons v. State Highway Comm’n, 234 A.2d 330, 332 (Me. 1967), and “[w]e give due regard to the opportunity of the trial court to judge the credibility of the witnesses and weigh the evidence.” Gray, 609 A.2d at 697 (citations omitted). The values placed on much of the property in the financial statement were also based on Donald’s own estimates; as the factfinder the court was free to conclude that his estimates at trial were more accurate measures of value than those in his financial statement submitted to the bank for the purpose of obtaining a loan. See Walters v. Petrolane-Northeast Gas Serv., Inc., 425 A.2d 968, 974 (Me. 1981) (jury was free to accept party’s testimony that value of property lost in fire was between $156,000 and $158,000 even though the party’s estimate of the same loss on a prior tax form was $61,064).
[¶ 15] Although Carol contends that the court’s findings regarding the value of the equity of the encumbered marital real estate and the value of some of their business interests are not supported by evidence presented at the hearing, there is competent evidence to support the court’s findings. The court’s calculation that the equity in the couple’s encumbered real estate is $165,000 is supported by Donald’s testimony,[3] as is the court’s finding that the present value of Donalco and Main Street Auto is about $123,700.[4] Finally, Donald testified at length about the value of his interest in Ariel Corporation and its current financial situation. The record supports the court’s finding that his interest in the corporation has no value, and since he is liable for a third of the corporate debt, his current interest in the enterprise is represented by a substantial claim on his other assets.[5] III.
[¶ 16] Carol contends that the court abused its discretion because it awarded Donald almost all of the marital property. She asserts that the court should have made her and Donald co-owners of the marital property because there was no reliable valuation data for the property and co-ownership was the only way to insure an equitable distribution.
(quoting Williams v. Williams, 645 A.2d 1118, 1123 (Me. 1994)). [¶ 18] The divorce court may, in its discretion and when justice requires, leave the divorced parties as co-owners of property with either party free to initiate proceedings for partition when the party wishes. Zillert
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v. Zillert, 395 A.2d 1152, 1157 (Me. 1978) (footnote omitted). Although the creation of joint tenancies in the marital property may be appropriate in some circumstances, the divorce court “should endeavor to divide the marital property in such a manner as to avoid continued financial interaction between the parties.”Berry v. Berry, 658 A.2d 1097, 1099 (Me. 1995) (citation omitted). Because “[w]e cannot expect divorced parties to continue a business relationship that will optimize resources and profits[,] . . . it is particularly important to avoid creating situations where the divorced parties remain in joint management of income producing property.” Id.
[¶ 19] The court acted within its discretion when it refused to make Carol and Donald co-owners of the marital property. Contrary to Carol’s contention, Donald’s testimony provided competent evidence regarding the value of the marital property on which the court based its distribution. Furthermore, creating joint tenancies would require continued interaction and business relations creating a potential for continued conflict between the parties. Nothing about the court’s refusal to make Donald and Carol co-owners violates a rule of law or creates a plain and unmistakable injustice. [¶ 20] We also reject Carol’s assertion that the court abused its discretion when it awarded Carol only the Florida condominium and half of the Eustis property. In light of the court’s findings as to the value of the assets and the amount of the liabilities, the court’s award does not create an instantly visible injustice and the court acted within its discretion.[6] IV.
[¶ 21] Carol contends the court abused its discretion when it did not award her greater alimony and that the factors in 19 M.R.S.A. § 721 (Supp. 1996)[7] mandate a larger award.
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609 A.2d 694, 698 (Me. 1992) (citation omitted). “[W]e defer to the discretion of the trial court unless `the court has violated some positive rule of law or has reached a result which is plainly and unmistakenly an injustice that is so apparent as to be instantly visible without argument.'” Arey v. Arey, 651 A.2d 351, 354 (Me. 1994) (quoting Bryant v. Bryant, 411 A.2d 391, 395 (Me. 1980) (quotations omitted)).
[¶ 23] The court acted within its discretion here. The court considered the length of Carol and Donald’s marriage and Carol’s lack of employment skills and balanced these factors against Donald’s current ability to pay, noting that Donald currently has no source of income, a negative cash flow from his rental units, and is liable for enormous debts. The court also reasoned that, because of the substantial debts on most of the properties, their liquidation would yield very little and would create high tax burdens because and tax bases of the properties were so low. Although Carol’s circumstances indicate that significant alimony would not be unwarranted, Donald’s current financial situation dictates that we affirm the court’s award. Donald testified that he is currently living on the proceeds of the home equity loan with no way to make a living other than to obtain small carpentry jobs, and his 1994 tax return reflects that his net taxable income for that year was only $20,284. Finally, the court recognized that Donald’s business interests in Ariel Corporation and Donalco may, in the future, be very profitable. The court’s award of $1 per year in alimony allows Carol to seek a modification of the alimony award in the future if Donald’s financial circumstances improve. V.
[¶ 24] Carol contends that Donald violated the preliminary injunction imposed by 19 M.R.S.A. § 692-A(1)(B)(1) (Supp. 1996)[8] when he transferred the Eustis property to their son and when he sold the rental units on Carleton and Harrison Streets. She argues that his economic misconduct should have been reflected in the divorce judgment.
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property, and the court did not err in finding that he did not violate the preliminary injunction.
VI.
[¶ 27] Carol contends that the court abused its discretion by refusing to order Donald to pay her attorney fees because she is incapable of paying them herself.
The entry is:
Judgment affirmed.
[*] The court awarded Donald one condo when it distributed the couple’s property but then awarded it to Carol in lieu of alimony.Equity Donald Carol
Baxter Blvd. residence $ 75,000 $ 75,000 Condos in Florida $200,000 $100,000[*] $100,000 Eustis property $217,000 $108,500 $108,500 Donalco Main St. Auto $123,700 $123,700 Rental properties $ 90,000 $ 90,000 Real estate partnerships 0 0 Ariel Corp. ($639,167) ($639,167) $ 66,533 ($141,967) $208,500
The court shall consider the following factors when determining an award of alimony:
A. The length of the marriage;
B. The ability of each party to pay;
C. The age of each party;
D. The employment history and employment potential of each party;
E. The income history and income potential of each party;
F. The education and training of each party;
G. The provisions for retirement and health insurance benefits of each party;
H. The tax consequences of the division of marital property, including the tax consequences of the sale of the marital home, if applicable;
I. The health and disabilities of each party;
J. The tax consequences of an alimony award;
K. The contributions of either party as homemaker;
L. The contributions of either party to the education or earning potential of the other party;
M. Economic misconduct by either party resulting in the diminution of marital property or income;
N. The standard of living of the parties during the marriage; and
O. Any other factors the court considers appropriate.
[E]ach party is enjoined from transferring, encumbering, concealing, selling or otherwise disposing of any property of either or both of the parties, except in the usual course of business or for the necessities of life, without the written consent of the parties or the permission of the court. . . .