In the Matter of the Marriage of: Kelley L. Olson & Ronald J. Olson

FILED
NOVEMBER 4, 2021
In the Office of the Clerk of Court
WA State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE

In the Matter of the Marriage of )
) No. 37500-5-III
KELLEY L. OLSON, )
)
Respondent, )
)
and ) UNPUBLISHED OPINION
)
RONALD J. OLSON, )
)
Appellant. )

SIDDOWAY, A.C.J. — This dissolution appeal presents only property

characterization and distribution issues. The primary issue is whether it is possible to

trace Kelley Olson’s separate property interest in funds inherited from her father into

assets she and Ronald Olson purchased in part with funds from a commingled account.

A forensic accountant the parties were court ordered to retain concluded that half

of Kelley’s1 inherited funds could be traced. Ronald characterizes the accountant’s work

as an inadequate allocation, rather than tracing. But the record on appeal supports the

conclusion that while the accountant ultimately relied on an allocation, he relied first and

foremost on tracing. Ronald fails to demonstrate that clear and convincing evidence did

1
Given the parties’ common last name, it will be easier for the reader if we refer
to them by their first names. We intend no disrespect.
No. 37500-5-III
In re Marriage of Olson

not support the trial court’s finding that Kelley had a separate property interest of

$82,189.05 in four of the parties’ assets.

Because Kelley’s separate property interest inhered in assets that the trial court

divided, an atypical financial adjustment was required. The trial court’s calculation of

the payment needed to equalize its division of assets it treated as community property

was correct, but we agree with Ronald that the additional liability imposed on him to

address Kelley’s separate property interest needs to be reduced by half.

We affirm the trial court’s finding that Kelley had a traceable separate property

interest but remand for a correction of the amount owed by Ronald.

FACTS AND PROCEDURAL BACKGROUND

Ronald and Kelley Olson separated in early January 2018 after almost 32 years of

marriage. Their three children were adults. Ronald, who was 59 years old at the time of

trial, was no longer employed, having experienced progressive multiple sclerosis. He

was receiving social security benefits and disability benefits from a privately-purchased

policy. Kelley, age 53 at the time of trial, worked as a dental hygienist, but only part-

time. This was because the work took what the court found to be a “high toll” on her

back. Clerk’s Papers (CP) at 104.

Through the parties’ many years of employment, their careful financial

management, and to a limited extent an inheritance Kelley received late in the marriage,

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they held assets with a net value of $2 million at the time of trial. Among the most

substantial of their assets were nine residential rental properties.

For purposes of the trial, the Olsons agreed to value the rental properties at their

assessed tax values. The assessed tax values of the rental properties and the mortgages

against them at the time of trial were as follows:

Property Value Mortgage
remaining
Augusta Property $117,900 $60,385
Dean Property $105,900 $60,118
1107 Knox Property $125,400 $57,687
429 Knox Property $153,900 $84,419
613 Knox Property $130,300 $84,217
Madison Property $239,500 $103,702
Olympic Property $184,650 $113,210
Rowan Property $227,230 $152,177
7th Ave. Property $171,300 $81,607

CP at 77-78.

It was Kelly’s position at trial that $164,378 she had inherited from her father

between the spring of 2011 and the end of 2014 had been used to make the down

payments for the Madison, 7th Avenue, and Olympic rental properties, and that she had a

traceable separate property interest in them. On that basis, she sought to have those

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properties (among other assets) distributed to her.2 But she had deposited her inherited

funds in a joint savings account that the couple maintained with the Spokane Firefighters

Credit Union (SFCU), into which community funds had sometimes been deposited, and

the assets of which were sometimes applied to community expenses.

Kelley testified that her reason for depositing the inherited funds into the SFCU

savings account was that the account was infrequently used, “so that was kind of kept

separate in there.” Report of Proceedings (RP) at 44-45. She testified that when her

father passed away she wanted to keep her inherited funds as separate property, but at the

time she and Ronald had recently reconciled after a period of separation. She explained

at trial,

2
The evidence established that Kelley received funds from her father’s estate in
the following amounts, on the following days:

April 4, 2011 $33,158.61
July 22, 2011 $3,166.67
September 23, 2011 $19,573.90
February 14, 2012 $11,270.00
August 10, 2012 $8,416.67
August 15, 2012 $9,819.12
May 3, 2013 $8,249.57
April 21, 2014 $6,719.57
December 31, 2014 $64,004.00
Total $164,378.11

Exs. P7, P8, P9, P17, P18, P19, P22, P24, P25.

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In re Marriage of Olson

[I] didn’t really want to put them in a separate account with just my name.
It would look like I wasn’t actually trying to work on our marriage. So that
would be kind of a red flag if I asked to put the money in a separate account
just in my name when we’d just gotten back together, so I put it in a
savings account where it could be traced.

RP at 45.

Ronald did not share Kelley’s view that down payments for the Madison,

Olympic, and 7th Avenue properties were made with her separate funds. He could point

to the facts that Kelley did not keep contemporaneous records of any segregation, and the

properties were purchased and financed in both parties’ names. Kelley conceded that the

decisions to buy the three properties were joint decisions and that she and Ronald both

participated in managing the properties.

After two days of trial, it was clear that this separate property tracing issue could

be material to the property division. The trial court recessed trial and ordered the parties

to identify a mutually-acceptable accountant to review whether Kelley’s inherited funds

could be traced to a separate property interest. The parties engaged certified public

accountant Scott Martin, and a couple of months later trial resumed for a third and final

day of trial at which Mr. Martin testified.

Mr. Martin testified that he invited both parties to provide him with financial

information and, after meeting with Kelley and reviewing her records, he prepared a

detailed spreadsheet of the deposits to, and expenditures from, the SFCU savings

account. It was admitted as exhibit 75. He determined that Kelley’s deposits to the

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In re Marriage of Olson

SFCU savings account of inherited funds totaled the $164,378.11 identified above. He

testified that he treated any deposit made that was not identifiable as inherited by Kelley

from her father as community funds. What we prefer to call these “other deposits” to the

savings account totaled $163,560.00.

Significantly, Mr. Martin’s testimony established that the “other deposits” were in

part a return and reinvestment of Kelley’s inherited funds. Because the SFCU account

was used when large assets were bought and sold, some part (and possibly a large part) of

the “other deposits” were not new infusions. Mr. Martin testified that vehicles and even

real property was purchased and sold with the cost and proceeds “coming and going”

through the account. RP at 307. He identified the dollar amount in one case: $31,700.00

from the account was used to purchase a recreational vehicle (RV) that the parties owned

for less than a year before selling it for $41,131.99 that was redeposited to the account.

The $41,131.99 is included in the $163,560.00 and was treated as presumptively

community, even though it would be more reasonable to trace its character to the funds

used to purchase the RV.

We do not know how large a part of the $163,560 was recycled through the

account as part of these “comings and goings” for two reasons. One reason is that Mr.

Martin was not asked about it. A second reason, more relevant to our decision, is that

exhibit 75, the critical spreadsheet, was not designated as part of the record on appeal.

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In re Marriage of Olson

Mr. Martin testified that the result of his “overall analysis” was that “but for the

inheritance [of] funds” there would not have been enough money to purchase the three

properties Kelley contended were traceable, as well as a fourth: the 429 Knox property.

RP at 310. His first example of a property necessarily purchased with substantially

inherited funds was the Madison property purchased in July 2011. Mr. Martin testified

that on January 21, 2011, the balance in the SFCU savings account was only $12,144.28.

Not knowing its source, he treated the $12,144.28 as community funds. On April 4,

2011, Kelley made her first deposit of inherited funds in the amount of $33,158.61. On

July 22, 2011, she made her second deposit of inherited funds of $3,166.67. The

Madison property was purchased in July 2011 with a down payment of $31,049.23 that

Mr. Martin testified came from the SFCU savings account. Mr. Martin testified he had

no difficulty concluding that the down payment on the Madison property was

substantially inherited funds, since “but for” inherited funds, $31,049.23 was not

available from the account. RP at 307.

Mr. Martin also concluded that down payments made from the SFCU savings

account for the 429 Knox, 7th Avenue, and Olympic properties were substantially

inherited funds. He explained that this was because the $146,380.89 balance in the

savings account before those purchases was almost entirely depleted by the down

payments for those properties ($41,407.75, $38,659.77 and $56,315.14, respectively)

between September 2015 and August 2016. With these properties, too, Mr. Martin

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In re Marriage of Olson

testified “the source of funds to buy the rental—the properties have to be traced back to

some separate property component; otherwise there would not have been enough funds to

buy those houses.” RP at 310.

At the conclusion of the trial, the court took the matter under advisement, later

issued a memorandum decision, and thereafter entered findings of fact, conclusions of

law, and the final divorce order. Relevant to the issues on appeal, the trial court found:

. . . Mr. Martin testified by and through his analysis that the petitioner
deposited into the SFFCU account $164,378.11, which could be
conclusively shown to have come directly from the petitioner’s late father’s
estate. However, when it came to tying a specific down payment on a
rental purchase to the petitioner’s inheritance, Mr. Martin testified that he
was unable to link all nine rentals to down payments provided from
petitioner’s inheritance funds. Mr. Martin also testified unequivocally that
four of the rentals without question received down payment contributions
directly from the petitioner’s inheritance. Said another way, Mr. Martin
testified that 50% of the amount the petitioner received as inheritance funds
could be traced, in the amount of $82,189.05.

. . . The Court finds that the petitioner has demonstrated through clear and
convincing evidence that the sum of $82,189.05 should be reimbursed to
her. Fairness requires and the equities of this case mandate no less.

CP at 101-02 (emphasis added).

Based on the values assigned and distribution ordered, the trial court calculated

that Ronald was left with a net estate of $1,103,425.90 and Kelley was left with a net

estate of $921,082.50. The court ordered Ronald to pay Kelley a total “equalization

payment” of $264,562.45, which it described as “represent[ing] the combination of

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In re Marriage of Olson

separate property reimbursement to [Kelley] of $82,189.05, plus $182,373.40 in required

marital estate equalization.” CP at 105.

Ronald moved for reconsideration. He pointed out a small arithmetic discrepancy

between the trial court’s figures for the net estate distributed to each party and the total

net estate. He also claimed that the trial court’s approach to calculating the marital estate

equalization and the separate property reimbursement incorrectly doubled or almost

doubled Ronald’s liability in both cases.

In responding to Ronald’s motion, Kelley agreed that the trial court’s findings

included an error, by understating the value of the net estate it ordered distributed to

Ronald. But she contended that its marital estate equalization payment was correct. As

for the order that Ronald pay her $82,189.05 as a separate property reimbursement, she

argued that “[b]ased on the total contributions of over $160,000” she had made, the

court’s adjustment for her separate property interest “is supported by the evidence

including the expert’s opinion, and the equities of the case.” CP at 126-27.

Ronald’s motion for reconsideration was denied. He appeals.

ANALYSIS

In a dissolution proceeding, all property, whether separate or community, is before

the court for distribution. In re Marriage of Schwarz, 192 Wn. App. 180, 188, 368 P.3d

173 (2016). The character of property, whether separate or community, is determined at

its acquisition. In re Marriage of Pearson-Maines, 70 Wn. App. 860, 865, 855 P.2d 1210

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In re Marriage of Olson

(1993). It is presumed assets acquired during the marriage are community property. In

re Marriage of Chumbley, 150 Wn.2d 1, 5-6, 74 P.3d 129 (2003); RCW 26.16.030. But

an asset acquired during marriage by gift or inheritance is separate property, as is an asset

acquired during marriage with the traceable proceeds of separate property. In re

Marriage of White, 105 Wn. App. 545, 550, 20 P.3d 481 (2001); RCW 26.16.010. While

a trial court is not bound to award property to the individual or the community based on

the property’s classification, “the court must have in mind the correct character and status

of the property as community or separate before any theory of division is ordered.”

Blood v. Blood, 69 Wn.2d 680, 682, 419 P.2d 1006 (1966). “Separate property will

remain separate property through changes and transitions, if the separate property

remains traceable and identifiable.” Chumbley, 150 Wn.2d at 5.

A party wishing to establish that an asset acquired during marriage is separate

property must present clear and convincing evidence that the acquisition fits within a

separate property provision. Id. The “clear and convincing” evidence standard does not

require irrefutable evidence; nor does it require proof beyond a reasonable doubt.

Schwarz, 192 Wn. App. at 218. “It does require positive evidence, direct or

circumstantial, that makes a proposition highly probable.” Id. The requirement of clear

and convincing evidence is not met by the mere self-serving declaration of the spouse

claiming the property in question that he acquired it from separate funds and a showing

that separate funds were available for that purpose. Pollock v. Pollock, 7 Wn. App. 394,

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In re Marriage of Olson

400, 499 P.2d 231 (1972). “‘Separate funds used for such a purpose should be traced

with some degree of particularity.’” Id. (quoting Berol v. Berol, 37 Wn.2d 380, 382, 223

P.2d 1055 (1950)). “If separate property becomes so commingled that it is impossible to

distinguish or apportion it, then the entire amount becomes community property.”

Chumbley, 150 Wn.2d at 5-6; see also In re Marriage of Skarbek, 100 Wn. App. 444,

448-49, 997 P.2d 447 (2000).

A trial court’s characterization of property as separate or community presents a

mixed question of law and fact. In re Marriage of Kile & Kendall, 186 Wn. App. 864,

876, 347 P.3d 894 (2015) (citing In re Marriage of Martin, 32 Wn. App. 92, 94, 645 P.2d

1148 (1982)). “‘The time of acquisition, the method of acquisition, and the intent of the

donor, for example, are questions for the trier of fact.’” Id. (quoting Martin, 32 Wn.

App. at 94). Accordingly, whether or not a rebuttable presumption of community or

separate character is overcome is a question of fact. See id. at 881 (reviewing whether

substantial evidence supports overcoming the presumption); In re Marriage of Mix, 14

Cal.3d 604, 612, 536 P.2d 479, 122 Cal. Rptr. 79 (1975). We review the factual findings

supporting the trial court’s characterization for substantial evidence. Schwarz, 192 Wn.

App. at 191-92. The ultimate characterization of the property as community or separate

is a question of law that this court reviews de novo. Id.

Mr. Martin testified repeatedly that he was able to trace inherited funds into four

of the parties’ rental properties because down payments were made from the SFCU

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In re Marriage of Olson

savings account and could not have been made without using inherited funds. See, e.g.,

RP at 307 (“but for the inheritance . . . deposit there would not have been enough funds to

buy [the Madison] house”); RP at 310 (“So, again, the overall analysis is that but for the

inheritance funds, there would not have been enough money to purchase the properties.”);

id. (“[T]he source of funds to buy the rental—the properties have to be traced back to

some separate property component; otherwise there would not have been enough funds to

buy those houses.”). This is easy to see with the purchase of the Madison house. Since

the down payment of $31,049.23 was made from the account3 and all but $12,144.28 of

the funds in the account were Kelley’s inherited funds, a clearly traceable separate

property investment of $18,904.98 was made in the house.4

Mr. Martin could have had the same level of confidence that inherited funds could

be traced into the 429 Knox, 7th Avenue, and Olympic properties through down

payments from the SFCU savings account. Ronald attempts to persuade us that the

$163,560 in “other deposits” and the use of funds from the account to pay community

expenses make tracing impossible, since inherited funds could have been applied to

consumptive expenses and “other deposits” could have been applied to down payments.

3
Ronald attempted to cast doubt on the source of the funds, but the evidence that
the down payment came from the SFCU savings account was sufficient. See, e.g., RP at
232-33, 324-26; Ex. P6 at 13, P12.
4
We ignore interest earned in the account between January and July 2011, and
acknowledge that the community investment would be inconsequentially larger and the
separate investment inconsequentially smaller.

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In re Marriage of Olson

But his argument ignores the “goings and comings” of reinvested funds.

A hypothetical will illustrate the importance of reinvested funds. The following

hypothetical history of transactions assumes an infrequently used account held by a

married couple into which one spouse deposits inherited funds, the couple deposits

community income tax refunds, some funds are transferred from the account to cover

overdrafts in a related checking account, and there are purchases and sales of vehicles in

addition to down payments made toward three properties.

Expenditure Community Separate Proceeds Account
property property from sale of balance
deposit deposit earlier-
purchased
asset
Inherited funds 20,000 20,000
Income tax refund 10,000 30,000
Inherited funds 40,000 70,000
Purchase of RV (50,000) 20,000
Inherited funds 40,000 60,000
Purchase of truck (50,000) 10,000
Sale of RV 60,000 70,000
Tfr to joint checking (10,000) 60,000
Income tax refund 10,000 70,000
Inherited funds 35,000 105,000
Sale of truck 40,000 145,000
Purchase of car (40,000) 105,000
Tfr to joint checking (10,000) 95,000
Down payment on (40,000) 55,000
property
Down payment on (40,000) 15,000
property
Sale of car 35,000 50,000
Down payment on (50,000) 0
property

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In re Marriage of Olson

As can be seen, the amount of inherited funds deposited ($135,000) is close to the

amount of “other deposits” (community property and proceeds from asset sales total

$155,000). $20,000 is transferred to cover overdrafts in the joint checking account. Yet

despite those facts, it can still be concluded with complete confidence that there is a very

substantial separate property investment in the three properties whose down payments

came from the account. Indeed, since only $20,000 in community property was ever

deposited in the account, one can conclude that a minimum of $110,000 of the $130,000

property down payments is traceable to separate property. In Mr. Martin’s parlance,

“[B]ut for the inherited funds, there would not have been enough money to purchase the

properties.” RP at 310.

Since exhibit 75 was not made a part of our record we cannot be sure that Mr.

Martin’s confidence in his ability to trace at least $82,189.05 was supported by a similar

analysis, but clearly tracing of that sort could have been possible. And it is suggested by

Mr. Martin’s testimony that before the purchase of the 429 Knox, 7th Avenue, and

Olympic properties, “there was $146,380.39 in the account, some of which was the

buying and selling of the vehicles, and the rest of it predominantly related to the

inheritance deposits we went through.” RP at 311.

The uncertainty must be held against Ronald, for failing to include exhibit 75 in

the record on appeal. RAP 9.2(b) provides that “[i]f the party seeking review intends to

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In re Marriage of Olson

urge that a verdict or finding of fact is not supported by the evidence, the party should

include in the record all evidence relevant to the disputed verdict or finding.” Because

the party seeking appellate review has the burden to provide an adequate record to review

his issues, the trial court’s decision must stand if this burden is not met. Fahndrich v.

Williams, 147 Wn. App. 302, 307, 194 P.3d 1005 (2008).

Ronald’s argument on appeal ignores Mr. Martin’s testimony that his tracing was

based on the fact that for the four properties he identified, there was insufficient money in

the savings account to make down payments without relying on the inherited funds.

Instead, Ronald treats Mr. Martin’s conclusions as based solely and simplistically on the

fact that roughly half the deposits to the account were inherited funds and the other half

were treated by Mr. Martin (at least for some purposes) as community funds. If that was

the only basis for Mr. Martin’s conclusion, Ronald would be right; that would not be

tracing. But Mr. Martin repeatedly explained his conclusion as based on the fact that the

account balance at relevant times was insufficient to make the four down payments

without relying on substantial inherited funds. He explained that arriving at a 50 percent

figure for the traceable funds was “difficult” and was “why we’re here.” RP at 313.

Considering Mr. Martin’s testimony as a whole, his decision to default to 50 percent

appears to have been a conservative approach to arriving at a number that could not be

precisely determined, since some funds in the account—arguably inherited funds—were

being consumed for other purposes. From what we know about the transactions in the

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In re Marriage of Olson

account, his treatment of only 50 percent of the inherited funds as traceable likely

benefitted Ronald. Ronald fails to demonstrate that the trial court’s finding is not

supported by clear and convincing evidence.5

While Mr. Martin’s testimony serves as substantial evidence supporting the trial

court’s finding that Kelley was entitled to a separate property reimbursement of

$82,189.05, the trial court’s findings also imply that it would have made the same

property distribution even if it had found no traceable separate property interest in the

rental properties. A trial court can make a disproportionate award of community property

to a spouse when her or his separate property materially benefits the parties before losing

its separate character. See, e.g., In re Marriage of Nuss, 65 Wn. App. 334, 828 P.2d 627

(1992) (origin of community property as one party’s separate property may be considered

as a reason for awarding all or a disproportionate share to that party); In re Marriage of

Tulleners, 11 Wn. App. 2d 358, 371, 453 P.3d 996 (2019) (court could make a disparate

5
We can summarily reject two passing arguments made by Ronald that are not
supported by the record. He represents that Mr. Martin testified he applied a “more likely
than not” standard when determining whether the inherited funds could be traced. RP at
323. What Mr. Martin actually did was merely answer “yes” when Ronald’s lawyer
asked if he could say it was more likely than not the funds were traceable. Mr. Martin
never said that he applied a predominance standard or that that the funds were not clearly
and convincingly traceable.
Ronald also represents that Mr. Martin testified that the “SFCU account” was
hopelessly commingled. But what he actually said was that the account balance
remaining at the end was hopelessly commingled. RP at 303, 314. Since Mr. Martin
concluded that half the inherited funds could be traced to down payments, he necessarily
concluded that those funds, at least, were not hopelessly commingled.

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award of hopelessly commingled retirement assets if presented with reliable evidence of

the separate value brought into the marriage). This appears to have been what the trial

court had in mind when, in addition to finding that Kelley established a separate property

interest, it further supported her right to reimbursement by finding that “[f]airness

requires and the equities of this case mandate no less.” CP at 102.

CHALLENGES TO THE CALCULATION OF RONALD’S EQUALIZATION PAYMENT

Ronald raises two challenges to the calculation of the $264,562.45 equalization

payment he was ordered to pay to Kelley. We begin with his challenge to the marital

estate equalization component of the payment.

A. Calculation of the marital estate equalization

Ronald challenges the trial court’s order that he pay $182,373.40 to Kelley as a

marital estate equalization payment.

The trial court’s findings on “Net Estate Value/Equalization” state that it awarded

Ronald a “gross estate of $1,950,425.40” and “a net estate of $1,103,425.90.” CP at 105

(some capitalization omitted). It found that it awarded Kelley a “gross estate of

$1,310,541.50” and “a net estate of $921,082.50.” Id. It found that the required marital

estate equalization amount was “$182,373.40.” Id. Kelley argued below and argues on

appeal that the trial court understated Ronald’s net estate, but that the marital estate

equalization amount is correct. It is clear that the trial court either misstated Ronald’s net

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estate or miscalculated the marital estate equalization amount. One number or the other

is wrong; both cannot be correct.

As demonstrated by the following distribution summary that we base on the

court’s memorandum decision, Kelley appears to have been correct about where the

mistake was made. The value of the net estate distributed to Ronald was much higher

than reflected in the trial court’s findings.

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Olson Property and Debt Value Debt Net Value Husband Wife
Westlake Drive $ 650,000.00 $ (250,533.00) $ 399,467.00 $ 399,467.00
Augusta Ave $ 117,900.00 $ (60,385.00) $ 57,515.00 $ 57,515.00
Dean Ave $ 105,900.00 $ (60,118.00) $ 45,782.00 $ 45,782.00
1107 Knox $ 125,400.00 $ (57,687.00) $ 67,713.00 $ 67,713.00
429 Knox $ 153,900.00 $ (84,419.00) $ 69,481.00 $ 69,481.00
613 Knox $ 130,300.00 $ (84,217.00) $ 46,083.00 $ 46,083.00
Madison Ave $ 239,500.00 $ (103,702.00) $ 135,798.00 $ 135,798.00
Olympic $ 184,650.00 $ (113,210.00) $ 71,440.00 $ 71,440.00
Rowan $ 227,230.00 $ (152,177.00) $ 75,053.00 $ 75,053.00
7th Ave $ 171,300.00 $ (81,607.00) $ 89,693.00 $ 89,693.00
Pontoon Boat $ 4,460.00 $ - $ 4,460.00 $ 4,460.00
firearms $ 1,500.00 $ - $ 1,500.00 $ 1,500.00
Honda CRV $ 3,700.00 $ - $ 3,700.00 $ 3,700.00
Chevy Pickup $ 6,500.00 $ - $ 6,500.00 $ 6,500.00
Honda Accord $ 20,000.00 $ (6,000.00) $ 14,000.00 $ 14,000.00
WA Trust (rental acct) $ 62,217.00 $ - $ 62,217.00 $ 31,108.50 $ 31,108.50
SFCU Savings $ 4,059.00 $ - $ 4,059.00 $ 2,029.50 $ 2,029.50
SFCU Checking $ 15,236.00 $ - $ 15,236.00 $ 7,618.00 $ 7,618.00
Car Wash Contract $ 298,020.00 $ - $ 298,020.00 $ 149,010.00 $ 149,010.00
NW Mutual IRA $ 44,076.00 $ - $ 44,076.00 $ 44,076.00
Ameritrade 072836 $ 122,040.00 $ - $ 122,040.00 $ 122,040.00
Ameritrade 072831 $ 454,759.00 $ - $ 454,759.00 $ 227,379.50 $ 227,379.50
Ameritrade 198623 $ 102,140.00 $ - $ 102,140.00 $ 51,070.00 $ 51,070.00
Misc Household goods $ 16,177.50 $ - $ 16,177.50 $ 15,147.50 $ 1,030.00
TOTALS $ 3,260,964.50 $ (1,054,055.00) $ 2,206,909.50 $ 1,285,827.00 $ 921,082.50

Ronald relies on the court’s misstatement of the value of his net estate to argue

that the marital estate equalization payment should be only $91,171.70. Opening Br. of

Appellant at 33. We disagree; what should be corrected instead is the erroneous finding

of the value of Ronald’s net estate.

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According to the foregoing distribution summary, the value of one-half of the

estate is $1,103,454.75, and a payment by Ronald to Kelley of $182,372.25 gets them

both to that amount.6 Given how close this equalization payment is to the payment

calculated by the court, we are confident that it mistakenly substituted the value of one-

half of the estate for the value of Ronald’s net estate in its findings.

The trial court did not err in calculating the marital estate equalization amount.

(We are unable to determine the reason for the de minimis $1.15 difference between the

trial court’s calculation and our own. No correction of that amount is required on

remand.)

B. Calculation of the separate property reimbursement

Ronald also complains that requiring him to pay Kelley an additional $82,189.05

to reimburse her separate property interest overpays her by a factor of two. Because her

separate property interest inhered in assets that the trial court was treating as community

property and chose to divide using a marital estate equalization payment, we agree that

the calculation of the adjustment for separate property needed to take into consideration

the fact that division of the community property already gave Kelly “her” half of the

separate property. All of the rental properties in which her separate property inhered

were distributed, and the equalizing payment ensured that she received her 50 percent

6
$1,285,827.00 - $182,372.25 = $1,103,454.75
$921,082.50 + $182,372.25 = $1,103.454.75

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No. 37500-5-III
In re Marriage of Olson

share. So the $1,103,454.75 in net assets she received included one half of her separate

property interest ($41,904.525) and Ronald’s $1,103.459.75 in net assets included the

other half. We agree with Ronald that he should have been required to pay her

$41,904.53 to account for her separate property interest.

This is an atypical adjustment and not intuitive. That it is the correct outcome can

be confirmed by analyzing what Kelley would have received had she been compensated

with community property before calculating the marital estate equalization component.

Assume she was compensated using the bank accounts and the payments owed under the

car wash contract, since those assets are sufficient and were allocated 50/50 by the court.

In that case, she would have received her $82,189.05 off the top. Not only would the net

value of the combined assets be reduced by $82,189.05, but the net value of the

community assets distributed to each party would be reduced by $41,094.525.

Total net value Husband net value Wife net value
$ 2,124,720.45 $ 1,244,732.475 $ 879,987.975

One-half the value of the combined net estate would have been reduced to

$1,062,360.22; the equalization payment would remain the same.7 The bottom line to the

parties? Instead of Ronald ending up with $1,285,827.00 – $182,372.25, or

$1,103,454.75, he would end up with $1,244,732.475 – $182,372.25, or $1,062,360.225:

7
$1,244,732.475 – $182,372.25 = $1,062,360.22
$879,987.975 + $182,372.25 = $1,062,360.22

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No. 37500-5-III
In re Marriage of Olson

in other words, $41,094.525 less. Instead of Kelley ending up with $921,082.50 +

$182,372.25, or $1,103,454.75, she would end up with $82,189.05 + $879,987.975 +

$182,372.25, or $1,144,549.27: in her case, $41,094.525 more.

$41,094.53, rather than $82,189.05, should have been the payment required of

Ronald as a separate property reimbursement. The matter is remanded for a correction of

the finding of the net value of assets distributed to Ronald and a reduction of the

equalization payment to reflect that reduction.

We reverse the amount of the equalization payment ordered by the trial court and

remand with directions to correct the finding of the net value of Ronald’s assets and to

reduce the equalization payment to a total of $223,467.93.8

A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.

_____________________________
Siddoway, A.C.J.
WE CONCUR:

_____________________________ _____________________________
Staab, J. Fearing, J.

8
Kelley requested an award of attorney fees under RAP 18.1(a) and RAP 18.9(a),
arguing that Ronald’s appeal was frivolous. Since we agree with one of his assignments
of error his appeal cannot be characterized as frivolous. The request for fees is denied.

22