Dubord v. Dubord

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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:  1997 ME 7
Docket:  AND-95-684
Argued November 4, 1996
Decided January 10, 1997

PANEL:  WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, RUDMAN, DANA and LIPEZ,
JJ. 

MARILYN DUBORD

v.

LIONEL DUBORD


CLIFFORD, J.
	[¶1]  Lionel Dubord appeals from a divorce judgment entered in the
Superior Court (Androscoggin County, Alexander, J.).  Lionel contends that
the court erred in determining that certain property was marital, made
errors in its calculations, and abused its discretion in establishing the
amount and duration of alimony.  Because we agree that the house in which
the parties had resided was erroneously classified as marital, we vacate the
judgment and remand for a reconsideration of all economic issues.
	[¶2]  Marilyn and Lionel Dubord were married in August 1968. 
Marilyn filed for divorce in August 1993, and a trial was held in 1995. 
Because there were no minor children, alimony and the characterization
and division of property were the primary issues before the court.
	[¶3]  Both before and during the marriage, the parties, personally and
through Lionel's real estate business, acquired a substantial amount of
property.  At the time of the trial, Lionel continued to own and operate a
real estate business while Marilyn was employed as a homemaker
companion earning $6.00 per hour.
	[¶4]  The court determined whether property was marital or
nonmarital and valued the marital real estate at $491,500.  The court set
aside the marital real estate to Lionel, and ordered Lionel to pay Marilyn
$245,000, to compensate her for her share of that marital estate.  Pending
that payment, the court ordered Lionel to pay Marilyn interest at a rate of
1% per month on the outstanding balance of the obligation.  The court also
awarded Marilyn alimony of $800 per month beginning on November 1,
1995, decreasing to $300 per month on November 1, 2000.  Additionally,
the court ordered Lionel to maintain Marilyn's health and medical insurance
until she becomes eligible for Medicare.
I.
	[¶5]  The determination of what property is marital and the
disposition of that property is governed by statute.  See 19 M.R.S.A. § 722-A
(1981).{1}  Section 722-A(2) defines marital property as "all property
acquired by either spouse subsequent to the marriage."  Pursuant to section
722-A, a trial court must:
	(1) determine what of the parties' property is marital and what
	is nonmarital, including the contributions each may have made
	to the acquisition of the marital property, recognizing the
	contributions of a spouse as a homemaker;
	(2) set apart to each that spouse's nonmarital property; and
	(3) divide the marital property between them in such
	proportion 	as the court deems just.

Williams v. Williams, 645 A.2d 1118, 1119 (Me. 1994).  The court's
determination of whether property is marital or non-marital is reviewed for
clear error and will not be disturbed on appeal if competent evidence in the
record exists to support it.  Nordberg v. Nordberg, 658 A.2d 217, 219 (Me.
1995) (citing West v. West, 550 A.2d 1132, 1133 (Me. 1988)).
	[¶6]  The court determined that real property located on Route 4 in
Jay (the Jay home) was marital property noting that "[t]he Jay home was
built for the plaintiff [Marilyn] and she first occupied it, [and that] it was
certainly intended to be part of the marital estate."  Lionel contends that
the court erred in this determination.
	[¶7]  Lionel acquired the land on which the Jay home was built by
deed in his name only in April 1966.  Lionel constructed the home on the
land six months prior to the parties marriage in 1968.  At that time,
Marilyn, two of her children and three of her younger siblings moved into
the home.  Lionel did not move into the home until after their marriage. 
The record title to the property remains in Lionel's name.
	[¶8]  The home was built using a revolving line of credit available to
Lionel through his construction business.  Approximately $16,000 from the
line of credit financed the construction of the home.  When the line of
credit was repaid in not clear.  The business records indicating how the line
of credit was repaid were destroyed fifteen to twenty years ago.  During the
course of their marriage the parties made various improvements to the
home including new siding, a new roof and interior decorating, and also
constructed a two-and-a-half car garage, a swimming pool, and outdoor
decks.  In addition landscaping work was done.  We agree with Lionel's
contention that the court's determination that the home was "intended to
be part of the marital estate" is unsupported by the record and constitutes
an error of law.
	[¶9]  Lionel purchased the land and built the Jay Home prior to the
marriage in 1968 and prior to the enactment of 19 M.R.S.A. § 722-A.  When
the home was constructed in 1968, Lionel could not have had the objective
intention of turning the property into marital property when, in fact, marital
property did not exist.  "Marital property," in its definition and effects, was
foreign to the law of divorce and it was a concept incapable of being within
the intent of Lionel.  See Young v. Young, 329 A.2d 386, 390 (Me. 1974).  In
Young, the acceptance by a husband of a joint tenancy deed on a home
before the adoption of the marital property statute did not transmute{2} the
property into marital property.  Although recognizing the doctrine of
transmutation, we stated:
Since "transmutation" is dependent upon an objectively
manifested exercise of "intent", and since in the present
context the legal structure establishing the critical distinction
between "marital" and "nonmarital" property had not yet come
into existence at the time of defendant's alleged exercise of
intent to "transmute" . . . , there can be no rational possibility,
here, that defendant had "transmuted."

Id.
	[¶10]  Furthermore, the record is devoid of any manifestation of an
intent by Lionel to create a gift to the marital estate during the marriage. 
Where we have upheld the transmutation of separate property to marital
property, one party has transferred a deed to both parties in joint tenancy. 
See e.g. Carter v. Carter, 419 A.2d 1018, 1022 (Me. 1980) (transfer from
one spouse to both spouses jointly evidenced intent to make a gift to the
marital estate).  In this case, the court committed clear error in finding that
Lionel had evidenced an intent to create a gift to the marital estate when he
built the Jay home in 1968, four years before the effective date of our marital
property statute.{3}  Therefore, we vacate that portion of the judgment
declaring the Jay home to be marital property and remand for a
redetermination of all economic issues.{4}
II. 

	[¶11]  Because we are remanding this case for a redetermination of all
economic issues, we decline to address additional issues raised by Lionel,
save one.  Lionel contends that the trial court should have considered the
tax consequences in dividing the marital property.  We agree.
	[¶12]  We have held that "[t]he value of marital assets should be
determined as of the time they are distributed without reference to possible
future events."  Bayley v. Bayley, 602 A.2d 1152, 1154 (Me. 1992) (citing
Crooker v. Crooker, 432 A.2d 1293, 1297 (Me. 1981)).  Unless the sale of
assets is ordered by the court, or a party makes clear that they intend to sell
the property, future tax consequences need not be considered.  Id.  In
Bayley, we concluded that the divorce court should have considered the tax
consequences of the sale of the marital residence in dividing marital
property when the wife made clear her intent to sell property prior to the
entry of the divorce decree.  Id.
	[¶13]  Lionel made known his intent to sell the properties to the
divorce court.  His testimony reflected that his business income has been
greatly diminished, that his obligations pursuant to the divorce judgment
could only be satisfied by selling the marital property, and that he was
meeting his obligation of the temporary support order through the sale of
property.  Accordingly, the tax consequences of such sale or sales should
have been considered.  See Bayley v. Bayley, 611 A.2d 570, 571 (Me. 1992).
	 The entry is:
							Judgment vacated.  Remanded to
							the Superior Court for further
							proceedings consistent with the
							opinion herein.

                                                              

Attorney for plaintiff:				

Robert A. Laskoff, Esq.				
LASKOFF and ASSOCIATES			
P. O. Box 7206 					
Lewiston, ME 04243-7206

Attorney for defendant:

David M. Sanders, Esq.
P. O. Box 271
Livermore Falls, ME 04254-0271

FOOTNOTES******************************** {1} 19 M.R.S.A. § 722-A provides in part: 1. Disposition. In a proceeding: (a) for a divorce . . . the court . . . shall divide the marital property in such proportion as the court deems just after considering all relevant factors . . . . 2. Definition. For purposes of this section only, "marital property" means all property acquired by either spouse subsequent to the marriage, except: A. Property acquired by gift, bequest, devise, or descent; B. Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent; C. Property acquired by a spouse after a decree of legal separation; D. Property excluded by valid agreement of the parties; E. The increase in value of property acquired prior to the marriage. {2} The "transmutation doctrine" refers to a change in the character of the property from separate to marital by an exercise of actual intention objectively manifested. See Carter v. Carter, 419 A.2d 1018, 1022 (Me. 1980). {3} 19 M.R.S.A. § 722-A became effective January 1, 1972. P.L. 1971, ch. 399, § 6. {4} Our conclusion that the court erred in finding the home to be marital property by virtue of Lionel's intent does not foreclose Marilyn, on remand, from demonstrating that the home, or a substantial part thereof, is marital property by virtue of its being acquired (i.e. paid for) during the marriage or that improvements were made to it during the marriage. See Williams v. Williams, 645 A.2d 1118, 1125 (Clifford, J., dissenting). Title 19 M.R.S.A. § 722- A(3) creates a presumption that any property acquired subsequent to the marriage is marital property.