Lowdermilk v. Lowdermilk

OPINION

COMPTON, Justice.

I. DID THE TRIAL COURT ERR IN DENYING DIANE’S MOTION TO DISQUALIFY SAMUEL’S ATTORNEY FOR CONFLICT OF INTEREST?

A. Facts

Diane was represented by Homer Burrell in a custody dispute with Philip Holman concerning their child Jamie. Diane and Samuel eventually became concerned about the quality of Burrell’s work. Samuel asked William Ford, his attorney in other matters including a domestic violence proceeding involving Diane, to look into the adequacy of Burrell’s representation of Diane in the custody dispute over Jamie. Ford says he told Samuel he did not want to get involved because Samuel had consulted Ford about a divorce, creating a potential conflict of interest. Samuel nevertheless brought Burrell’s case file to Ford, who “did not review” it, but only “glanced through” it. Ford also reviewed the court file.

Burrell stated to the court that his file contained no mental impressions or attorney work product, but only mirrored the contents of the court file plus billings and copies of legal opinions. He also stated that during the only conversation, he had with Ford about the matter he expressed no opinion concerning Diane’s suitability as a parent.

The trial court denied Diane’s motion to disqualify Ford, stating that it was unable to find that there was a former professional relationship between him and Diane and that there was no substantial possibility that Ford gained any knowledge in his contacts with Burrell and exposure to the file which could be used against her.

B. Discussion

We will reverse a trial court’s decision concerning a motion to disqualify opposing counsel only when it constitutes an abuse of discretion. Munn v. Bristol Bay Hous. Auth., 777 P.2d 188, 196 (Alaska 1989).

This court has stated:

We believe that an attorney may not represent a third party against a former client where there exists a substantial possibility that knowledge gained by him in the earlier professional relationship can be used against the former client, or where the subject matter of his present undertaking has a substantial relationship to that of his prior representation.

Aleut Corp. v. McGarvey, 573 P.2d 473, 474-75 (Alaska 1978). The superior court found that no professional relationship existed. This finding is supported by evidence that Diane never consulted with Ford and that Ford did not have access to confidential information about Diane. Since Ford did not have access to confidential information, there was nothing he could possibly use against Diane. Since there was no “prior representation,” we need not determine whether the subject matter in this case has a substantial relationship to the custody dispute between Diane and Philip Holman. The order is affirmed on this issue.

II. PROPERTY DIVISION.

A. Facts

At the time of the parties’ marriage, Samuel owned and operated full-time a car business, known as Alaska Motor Doctor, out of his garage. During the marriage, he continued to operate the Alaska Motor Doctor full-time, except for a nine-month to *877one-year period during which he took a second job and worked at the Alaska Motor Doctor part-time.

Diane also worked at the Alaska Motor Doctor during the marriage, though evidence as to the extent of her involvement is conflicting. The evidence indicates that at least she picked up parts at various times and performed some administrative tasks for the business.

The superior court determined that Alaska Motor Doctor was Samuel’s separate property.

A 1985 Ford Bronco was purchased during the marriage. Diane made the down payment, but the evidence is conflicting as to whether Samuel reimbursed her fully or only for half of it. Samuel made the monthly payments out of his separate retirement account, and at one point he borrowed $5,000 to redeem it from repossession after he fell behind in the payments. The superior court found that Samuel repaid Diane for the funds she advanced and that the Bronco was Samuel’s separate property.

Samuel sought reimbursement for roughly $17,000 worth of time and money he claimed he expended on two houses which were Diane’s separate premarital property. As proof of expenditures he introduced some of the checks he remembered were expenditures for material used on Diane’s properties. He had no receipts or other record of expenditures, and Diane testified she had “no doubt” that she paid for all of the materials used on her houses out of her separate account. Samuel claimed he spent 460 hours of labor on the houses, 163 of which he performed before the marriage. The superior court determined he was entitled to reimbursement for half of his claimed expenditures and labor.

B. Discussion

When a marriage is of long duration or assets are commingled, the method for determining property division is governed by Wanberg v. Wanberg, 664 P.2d 568 (Alaska 1983), and Merrill v. Merrill, 368 P.2d 546 (Alaska 1962). When the marriage is of short duration and the parties do not commingle assets, an alternative method is to treat property division as if it were contract rescission. Rose v. Rose, 755 P.2d 1121 (Alaska 1988). In Bell v. Bell, 794 P.2d 97, 102 (Alaska 1990), we held the alternative method was unavailable, even though the marriage was of short duration, because the couple had “combined thousands of dollars to acquire and improve various property.” Bell is not apposite here because the Bells’ commingling of assets was significantly more substantial than the Lowdermilks’. However, the superior court did not use the alternative method of Rose, which requires that it put the parties back to the positions they were in before the marriage. The superior court instead reimbursed Samuel for his efforts both before and during the marriage, while giving him the entire benefit of Diane’s efforts towards Motor Doctor during the marriage.

The correct method of property division in this case is the method set forth in Wanberg and Merrill. It involves (1) identifying the specific property available for distribution, (2) determining the value of this property, and (3) determining the most equitable division of the property, beginning with the presumption that an equal division is most equitable. Bell, 794 P.2d at 101; Wanberg, 664 P.2d at 570, 574-75.

C. Did the Superior Court Err in Finding that The Alaska Motor Doctor and All of its Assets were Samuel’s Separate Property?

The superior court found that Alaska Motor Doctor was Samuel’s separate property. Diane asserts that any increase in Alaska Motor Doctor’s tangible assets acquired after the marriage, including inventory and accounts receivable, is marital property subject to division. We agree.

Alaska Statute 25.24.160 allows the trial court to divide the property, whether joint or separate, acquired only during marriage, in a just manner. The time and energy of both spouses during the marriage is to be considered in dividing marital property. See, e.g., Bussell v. Bus-*878sell, 623 P.2d 1221, 1223-24 (Alaska 1981). Samuel should not be allowed to take his contributions of time and energy out of the marital estate by rolling them back into a business which he began before the marriage. Diane devoted much of her time and energy during the marriage to caring for the couple’s child and keeping the family home. It is also undisputed that she made some direct contribution to the business during the marriage. It is “an abuse of discretion for the trial court to shield the property from equitable distribution merely by affixing to the property the label of ‘pre-marital asset.’ ” Wanberg, 664 P.2d at 572. This is exactly what the superior court did with Alaska Motor Doctor. Our comments in Wanberg apply equally well to this case:

There may well be reason for granting less than an even share in this property to [the other spouse], but we hold that such a determination must be made through the exercise of the'trial court’s equitable discretion, to be guided by the factors relevant to such determinations, and to be articulated in terms of those factors.

Id.

D. Did the Trial Court Err in Classifying the Bronco as Separate Property?

Property purchased during a marriage, yet paid for out of one party’s separate assets, may be considered a premarital asset so long as the parties did not demonstrate an intent to jointly hold the property. See Carlson v. Carlson, 722 P.2d 222, 224-25 (Alaska 1986). Samuel presented evidence that he ultimately paid for the Bronco entirely out of his own premarital property. The superior court accepted Samuel’s evidence and found that the Bronco was Samuel’s separate property. This finding is not clearly erroneous.

E. Did the Trial Court Err in Reimbursing Samuel for Work Accomplished on Diane’s Separate Property?

The superior court accepted Samuel’s testimony about his expenditures on Diane’s separate property, and found that he was entitled to reimbursement for half that amount. This finding is not clearly erroneous in light of the evidence presented. Samuel’s evidence consisted of his own recollection of the work he performed. Although he had no receipts for materials purchased, he presented independent documentary evidence consisting of a sampling of checks he said were for materials for Diane’s properties. Diane testified that she had “no doubt” that she paid all of the separate property expenses out of her own account. Jim Black, who worked on Diane’s properties on jobs for which Samuel claimed reimbursement rights, testified that many of the jobs Samuel listed were either not done or took substantially less time to accomplish than Samuel claimed. On the record as a whole, we are not left with a definite and firm conviction that the trial court made a mistake.

However, the trial court failed to distinguish pre-marital from post-marital expenditures. Samuel is not entitled to reimbursement for expenditures made gratuitously and not in contemplation of marriage. The trial court must determine what portion of the 163 hours of labor performed prior to the marriage, if any, are subject to reimbursement.

III. DID THE TRIAL COURT ERR IN AWARDING CUSTODY OF CHRISTOPHER TO SAMUEL?

The issue of custody must be remanded for reconsideration, in light of the inadequacy of the record to support certain findings, consideration of improper factors, and failure to consider mandated factors. The trial court may take additional evidence on interim conditions when reconsidering custody.

The trial court considered improper factors and at the same time failed to consider statutorily mandated factors. See McClain v. McClain, 716 P.2d 381, 385 (Alaska 1986). The court’s written findings state:

DIANE LOWDERMILK was generally not a credible witness and it was difficult *879to believe anything she said. She also projects her feelings onto other persons. The court specifically finds that DIANE LOWDERMILK is unstable. The court believes the testimony of Dr. Cassell regarding both parties. The comments and findings made by the court in Holman v. Lowdermilk apply in this case as well. The court also finds DIANE LOWDER-MILK does not see the world as the average person sees it, and would therefore not be a good role model for the child. The court finds that DIANE LOWDERMILK has undermined the child/father relationship by her conduct and the court had no confidence that this is likely to change in the future.

It was improper to consider that Diane “does not see the world as the average person sees it” without any articulated explanation of what these statements mean and how such factors affect her parenting ability.1 This finding bears on her mental state, and there must be a nexus between mental state and parenting ability for it to be a proper consideration. See Morel v. Morel, 647 P.2d 605, 608 (Alaska 1982).

The court ignored the issue of spousal abuse, a factor it is required to consider by AS 25.24.150(c)(7), despite extensive evidence of spousal abuse in the record.. Although detailed findings on every factor mandated by AS 25.24.150(c) are not required where the factor is not at issue, spousal abuse was unquestionably at issue in this case. The court abused its discretion by failing to make findings in regard to spousal abuse, its effect on Diane, and its effect — if any — on Diane’s apparently unacceptable mental state, i.e. her instability.

IV. DID THE TRIAL COURT ERR IN DENYING DIANE’S COUNTERCLAIM SEEKING COMPENSATION FOR INJURIES RESULTING FROM DOMESTIC VIOLENCE INCIDENTS?

In its written findings of fact, the superior court stated: “The court finds that as to the assaults alleged in the counter claim, that they were not intentionally inflicted, but came about because of DIANE LOWDERMILK’S own actions.” We are unable to discern from this statement the basis of the superior court’s denial of Diane’s tort claim. Samuel admitted that he intended the contact which resulted in Diane’s injuries. A person is liable for assault and battery if the person intends to cause harmful or offensive contact. Merrill v. Faltin, 430 P.2d 913, 917 (Alaska 1967). Intent to cause physical injury is not required. It is unclear from the finding quoted above whether the superior court found Samuel was not liable because he had an affirmative defense or for some other reason, or that the court applied the incorrect legal standard. This issue is remanded to the superior court for redetermi-nation.

V. CONCLUSION.

The superior court’s order denying Diane’s motion to disqualify Mr. Ford for conflict of interest is AFFIRMED. The decree of divorce is AFFIRMED in part, REVERSED in part, and REMANDED for proceedings consistent with this opinion.

MATTHEWS, J., with whom BURKE, J., joins, dissenting in part.

. The trial court also found that Diane was "unstable,” without any articulated explanation of what it meant in using such a conclusory term. Some explanation of the term in context may be helpful.