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In re Marriage of Larson

Court of Appeals of Washington, Division 1

November 25, 2013

In the Matter of the Marriage of Christopher Ross Larson, Appellant, and Julia Larson Calhoun, Respondent

Appeal from King County Superior Court. Docket No: 10-3-04077-7. Date filed: 02/03/2012. Judge signing: Honorable William L Downing.

Catherine Wright Smith and Valerie A. Villacin (of Smith Goodfriend PS ); and Thomas G. Hamerlinck (of Thomas G. Hamerlinck PS ), for appellant.

Janet A. George (of Janet A. George Inc. ); and Philip A. Talmadge and Emmelyn Hart (of Talmadge / Fitzpatrick ), for respondents.

AUTHOR: Linda Lau, J. WE CONCUR: James Verellen, J., Ann Schindler, J.

OPINION

Page 1229

Lau, J.

[178 Wn.App. 135] ¶ 1 This case requires us to determine whether a trial court's authority to award one spouse's separate property to the other spouse in a dissolution action is limited to circumstances where a spouse cannot be amply provided for from community property alone. We conclude that RCW 26.09.080 does not single out the property's character or any other factor to be given more weight. This statute and controlling case authority direct the trial court to make a fair and equitable property division after weighing all relevant factors within the context of the parties' specific circumstances. Because the trial court properly exercised its discretion when it applied this rule to determine a fair and equitable property division, we affirm.

FACTS

¶ 2 Before marrying Julia Calhoun in 1986, Christopher Larson acquired an equity interest in a young company [178 Wn.App. 136] called Microsoft.[1] This interest developed into a colossal fortune, which Larson held principally as his separate property. The marital community also amassed considerable wealth, traceable largely to Microsoft stock options exercised by Larson during the marriage. Larson treated all purchased stock as a community asset, thereby relinquishing any claim to the separate property portion of the asset.[2]

¶ 3 During this long-term marriage, Calhoun " made a major contribution to all that the community accomplished, measured in terms of their children, their foster children, their impact in the broad community and their more narrow business interests." The trial court found that " the marital community benefitted greatly from [Calhoun] serving as, in her phrase, the 'approachable face' of the couple."

¶ 4 Following a three-week trial, the court entered detailed findings of fact and conclusions of law, identified the couple's assets and liabilities, determined their value, characterized each as separate or community, and directed a fair and equitable division. The court awarded Calhoun various community assets worth approximately $139 million. Larson assumed a net community obligation of approximately $29.5 million. Calhoun retained separate property worth $669,000. She assumed no community debt.

¶ 5 Citing its " broad equitable powers" to " make a lopsided division of community assets and also invade a separate estate to the extent necessary to achieve a just result," the court also awarded Calhoun more than $40 million dollars of Larson's separate property. To effectuate this award, it ordered Larson to transfer shares of Microsoft stock, valued at approximately $14 million,[3] and to make three cash installment payments totaling $27 million.

[178 Wn.App. 137] ¶ 6 Larson ultimately retained separate assets worth approximately $357 million. His combined award totaled approximately $327 million dollars. Calhoun's combined award totaled approximately $181 million. Larson appeals the award of a portion of his separate property to Calhoun.

Page 1230

ANALYSIS

¶ 7 Larson challenges the trial court's decision to award approximately $40 million of his separate property to Calhoun. He asserts no challenge to the court's decision to award Calhoun 100 percent of the net community estate or to the court's valuation or characterization of the parties' property. He acknowledges, " [T]his is not a factual appeal." Br. of Appellant at 4.

¶ 8 Larson contends that the trial court " applied an improper legal standard and consequently abused its discretion in awarding Calhoun a significant share of [his] separate estate in addition to the net value of all the community property, because more than ample provision could have been made for Calhoun from the parties' $109 million net community estate." Br. of Appellant at 4-5. He argues that we should " reverse the trial court's distribution of the marital estate and direct the trial court on remand to limit its award to the wife to the net value of the community estate." Br. of Appellant at 42.

¶ 9 In a dissolution action, the trial court must order a " just and equitable" distribution of the parties' property and liabilities, whether community or separate. RCW 26.09.080. All property is before the court for distribution. In re Marriage of Farmer, 172 Wn.2d 616, 625, 259 P.3d 256 (2011). When fashioning just and equitable relief, the court must consider (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 property distribution is to become effective. RCW 26.09.080. [178 Wn.App. 138] These factors are not exclusive. The statute requires the court to consider all " relevant factors." RCW 26.09.080.

¶ 10 The court has " broad discretion" to determine what is just and equitable based on the circumstances of each case. In re Marriage of Rockwell, 141 Wn.App. 235, 242, 170 P.3d 572 (2007). A just and equitable division " does not require mathematical precision, but rather fairness, based upon a consideration of all the circumstances of the marriage, both past and present, and an evaluation of the future needs of parties." In re Marriage of Crosetto, 82 Wn.App. 545, 556, 918 P.2d 954 (1996). " Fairness is attained by considering all circumstances of the marriage and by exercising discretion, not by utilizing inflexible rules." In re Marriage of Tower, 55 Wn.App. 697, 700, 780 P.2d 863 (1989). " Just and equitable distribution does not mean that the court must make an equal distribution." In re Marriage of DewBerry, 115 Wn.App. 351, 366, 62 P.3d 525 (2003). " Under appropriate circumstances [the trial court] need not award separate property to its owner." In re Marriage of White, 105 Wn.App. 545, 549, 20 P.3d 481 (2001).

¶ 11 The trial court is in the best position to decide issues of fairness. In re Marriage of Brewer, 137 Wn.2d 756, 769, 976 P.2d 102 (1999). Accordingly, " [a] property division made during the dissolution of a marriage will be reversed on appeal only if there is a manifest abuse of discretion." In re ...


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