Washington Appeals Court Upholds Spousal Maintenance Award to Repay Debt

Courts in Washington divorce cases must make an equitable and just distribution of the couple’s property and liabilities.  In some cases where one spouse owes the other, spousal maintenance or alimony may be used to achieve an equitable and just distribution.  In a recent case, a husband challenged the award of spousal maintenance to pay off his share of the community debt.

The evidence showed the wife had a home worth about $500,000 with a mortgage and about $400,000 in other assets at the time of the marriage.  A prenuptial agreement provided that the husband had no interest in the home. The husband had a checking account with a small balance and a vehicle.  He also had an interest in a limited liability company he established and shares of another company, with values listed as “unknown.” He owed $8,000 on the vehicle, $36,000 in back taxes, and $55,000 on a promissory note to the wife.  The wife’s assets were depleted during the marriage and the couple accrued significant community debt in the wife’s name.

In accordance with the prenuptial agreement, the trial court awarded the home to the wife.  It also ordered the husband to repay the promissory note.  The trial court found a BMW in the wife’s name was community property.  In her petition, the wife listed the vehicle and the debt on it as property to be awarded to the husband.  She ultimately changed that position, partly because the husband had not obtained separate financing.  The trial court awarded the vehicle to the wife, noting the husband had surrendered his driver’s license and therefore would not be allowed to drive for a significant while.

The court found there was $217,000 in community debt through the wife’s home equity line of credit and credit cards.  The trial court divided $150,000 of that amount equally.  It gave the husband a $2,000 credit for his separate property.  The trial court ordered the husband pay the wife $1,000 per month for 73 months in spousal maintenance to repay his share of the debt.  The trial court awarded the vehicle loan to the wife. It also awarded the husband the IRS debt in his name.  The trial court also ordered the husband pay the wife for attorney’s fees up to the trial date based on the husband’s intransigence.

The husband appealed, arguing the wife did not need, and he could not afford, to pay maintenance.  The appeals court noted the trial court awarded the maintenance to accomplish a fair and equitable division of the debt, not to equalize the parties’ standard of living after the divorce.  The trial court specifically stated it had considered the husband’s ability to pay when it structured the repayment in monthly installments.  The Washington Supreme Court has previously held that a maintenance award is appropriate where the assets of the parties were insufficient to allow one spouse to be compensated what the other spouse owed.

The husband argued the wife earned enough money to maintain the lifestyle they had while married, but his income was only $1,195 per month.  The appeals court found nothing in the record supporting the husband’s claimed income.  The  trial court found the husband was not a credible witness.  The trial court found the husband was a “self-described, high-level business executive” and the record suggested he earned several thousand dollars per month.  The court noted that he lived with his mother and fiancée in a three-income home, but the wife faced a serious illness while relying only on her own income.

The appeals court found no abuse of discretion in the maintenance award.

The husband also challenged the award of the BMW to the wife.  He argued he had previously made all of the monthly payments.  He also argued the wife had another vehicle and had not wanted the BMW.  He also argued the court erred in awarding the vehicle to the wife based on his impaired driving conviction.

The appeals court found no evidence supporting the husband’s statement he had made more than $10,000 in payments for the vehicle.  The wife testified he had made some, but not all, of the payments on the vehicle.  She testified she did not want the vehicle at the time of separation, but she was concerned about her credit rating and liability for the loan if the husband did not refinance it in his own name.  When he failed to get his own financing, she asked for the car to be returned to her.

The husband argued Washington law requires property division without regard to misconduct.  The appeals court found the consideration of the court of the fact the husband would not be legally permitted to drive for a significant period was not a consideration of “marital misconduct.” The appeals court found the court’s decision was based on the “practical reality” of the situation and not whether he had committed misconduct.

The appeals court also noted the award was not based solely on the husband’s lack of driving privileges.  The court also considered the fact the loan was in the wife’s name and she would suffer the effects of missed payments.  The appeals court noted the husband had already missed some payments at the time of trial.

The appeals court found no abuse of discretion in awarding the vehicle to the wife.

The appeals court also rejected the husband’s challenge of the order to pay the promissory note and attorney’s fees.  The appeals court affirmed and awarded the wife fees and costs for the appeal.

If you anticipate filing for divorce, an experienced Washington family law attorney can help you get a fair distribution of property and debt.  Call Blair & Kim, PLLC, at (206) 622-6562 to set up an appointment.