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In re Domestic Partnership of Walsh

Court of Appeals of Washington, Division 2

September 30, 2014

In the Matter of the Domestic Partnership of Jean M. Walsh, Appellant, and Kathryn L. Reynolds, Respondent

Oral Argument June 27, 2014

Page 985

Appeal from Pierce County Superior Court. Docket No: 11-3-00924-5. Judge signing: Honorable Stephanie a Arend. Judgment or order under review. Date filed: 11/05/2012.

Barbara A. Henderson (of Smith Alling PS ), for appellant.

Janis M. Dyer (of Jan Dyer Law and Mediation ); and Catherine W. Smith and Valerie A. Villacin (of Smith Goodfriend PS ), for respondent.

Authored by J. Robin Hunt. Concurring: Thomas R Bjorgen, Linda CJ Lee.

OPINION

Page 986

[183 Wn.App. 834] Hunt, J.

¶ 1 Jean M. Walsh appeals and Kathryn L. Reynolds cross appeals the trial court's decree of dissolution [183 Wn.App. 835] of domestic partnership, challenging the court's findings of fact and conclusions of law. They argue that the trial court erred in (1) ruling that they had lived in an " equity relationship" [1] between January 1, 2005, and August 20, 2009; (2) ruling that they owned their Federal Way home as tenants in common; and (3) awarding each approximately 50 percent share of equity in the Federal Way home.[2] Walsh also appeals the trial court's award of attorney fees and costs to Reynolds.

¶ 2 We affirm the trial court's finding of an " equity relationship" between the parties for purposes of equitably allocating their community property in dissolving their registered domestic partnership. We reverse the trial court's finding that this " equity relationship" began only in 2005 and remand to the trial court to reconsider and to amend its finding about when the parties' " equity relationship" began and then to reassess its equitable distribution of community property based on this finding. We also affirm the trial court's award of attorney fees and costs to Reynolds, and we grant her attorney fees and costs on appeal.

[183 Wn.App. 836] FACTS

I. Relationship

¶ 3 Jean Margaret Walsh is an orthopedic surgeon living in Pierce County. In 1986, she moved to Fresno, California, where she purchased a home with her personal savings. In 1987, she used additional personal savings to purchase a private medical practice.

¶ 4 In 1988, Walsh met Kathryn Reynolds. After dating for about three months, Reynolds moved into Walsh's Fresno home, but she paid no mortgage or utilities. Thereafter, Walsh and Reynolds lived together for 20 years but maintained separate bank accounts and financial records. Reynolds was then working for a hardware store; she later worked for a custom home builder.

¶ 5 Soon after Reynolds moved in with Walsh, they agreed that Walsh would pay Reynolds a salary for performing housekeeping

Page 987

at the home they shared. At Reynolds' request, Walsh fired her former housekeeper and hired Reynolds to perform the same work for the same pay. Walsh also made contributions to Reynolds' separate retirement account.

¶ 6 In 1989, Reynolds was laid off from her custom homebuilding job and returned to school at Fresno State University. Walsh paid Reynolds' tuition and other educational expenses; Reynolds completed her degree in 1993.

¶ 7 In 1992, Walsh gave birth to a daughter. Walsh paid Reynolds additional money for day-care services for her daughter. In early 1993, Reynolds moved out of Walsh's house, but Walsh continued to pay Reynolds for household and day-care services. A few months later, however, Reynolds moved back into Walsh's house. In December 1993, Reynolds adopted Walsh's daughter.

¶ 8 In 1996, Walsh gave birth to a son, whom Reynolds adopted in 1997. When Walsh was pregnant, she had decided [183 Wn.App. 837] to sell her private medical practice. The medical equipment sold for about $20,000.00. Walsh also sold for $131,766.22 one share of a local health management company, which she had acquired in 1987, the year before she met Reynolds. Walsh used these proceeds and a portion of her personal bank account to purchase a 20-acre eastern Fresno property in her own name. Walsh's income decreased significantly after she sold her practice, but she continued to pay Reynolds at the same rate as previously.

¶ 9 In 1998, Reynolds gave birth to a daughter, whom Walsh adopted in 2000. Walsh paid for all three adoptions, all the children's expenses, the entire mortgage, all utilities, and all other household expenses. When Reynolds paid for something for the children or for the household, she would request and receive reimbursement from Walsh. For purposes of buying household items, Walsh added Reynolds as an authorized user on Walsh's separate credit card in 2000; in 2007, Walsh added Reynolds as an authorized user on another separate credit card.

¶ 10 Between 1990 and 2011, Walsh paid Reynolds over $500,000. Walsh also paid off Reynolds' $7,500 credit card debt, which Reynolds later repaid to Walsh with a $500 monthly deduction from her day-care and housekeeping salary.

A. Registered Domestic Partners, California, 2000

¶ 11 On March 6, 2000, Walsh and Reynolds registered as domestic partners in California. That year, Walsh sold her eastern Fresno property and purchased a house in Tacoma, Washington, again in her own name. In June, Walsh and Reynolds moved to Washington, where Walsh found employment as an orthopedic surgeon.

¶ 12 Walsh and Reynolds continued their existing financial arrangement: Walsh paid the mortgage; health, dental, and auto insurance; the children's private school tuition; and other household expenses. Walsh also provided Reynolds [183 Wn.App. 838] with medical benefits by listing her as a domestic partner with her insurer, and continued to pay Reynolds an income. Walsh and Reynolds kept titles for their respective personal cars in their own names; title to the family car, however, was in both names.

¶ 13 In 2003, Walsh sold the Tacoma home and used the sale proceeds to purchase a home in Federal Way. This time, Walsh and Reynolds both signed the deed, which expressly stated that they were " acquir[ing] all interest" in the property " as joint tenants with right of survivorship, and not as community property or as tenants in common." Clerk's Papers (CP) at 368. Walsh, however, took out a mortgage on the Federal Way property solely in her name; again, Reynolds made no financial contribution to the home's purchase or mortgage. Walsh also paid for all utilities, until the parties' 2012 dissolution.

B. Registered Domestic Partners, Washington, 2009

¶ 14 In August 2009, Walsh and Reynolds registered as domestic partners in Washington. They separated seven months later on March 14, 2010.

Page 988

II. Procedure: Domestic Partnership Dissolution Trial

¶ 15 Walsh petitioned for dissolution on March 11, 2011. The parties agreed on a parenting plan and child support order for their 16- and 13-year-old children. Post separation and dissolution, Walsh continues to pay for over 92 percent of the private school tuition for their son and younger daughter and nearly all college tuition and costs for their older daughter. Collectively, the parties had amassed over $2 million in real property, retirement, and investment accounts at the time of the dissolution. Only property distribution and attorney fee issues remained for trial.

[183 Wn.App. 839] ¶ 16 After a three-day trial, the trial court assessed the five Long [3] factors[4] as applied to Walsh and Reynolds' relationship and found that they had lived and held themselves out as family for almost 23 years, since 1988, when they began cohabiting in California. The trial court also noted that if these two people " were a heterosexual couple that had been cohabiting since 1988 ... this Court would not hesitate to find that a meretricious or equity relationship existed for the 20 plus years prior to the date of the [formal statutory Washington] marriage." Suppl. CP at 412.

¶ 17 Nevertheless, the trial court concluded that (1) the parties had lived in an " equity relationship" beginning January 1, 2005,[5] until they registered as domestic partners under Washington's Domestic Partnership Act, chapter 26.60 RCW, in 2009; (2) therefore, the property the parties had acquired during this " equity relationship" period was subject to equitable distribution as if it were community property; and (3) the property the parties had obtained after their August 20, 2009, domestic partnership registration in Washington, but before their March 14, 2010, separation, was community property.

¶ 18 The trial court also (1) found that the parties owned the Federal Way residence as tenants in common; (2) ordered the residence sold; (3) awarded Walsh an initial $40,834.42 from the sale of the house for mortgage payments [183 Wn.App. 840] on the home before January 1, 2005[6] and (3) divided the remaining proceeds 51.89 percent to Walsh and 48.11 percent to Reynolds. The trial court divided equally the remaining community property assets acquired between January 1, 2005, and March ...


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