In re the Marriage of Branscomb

117 P.3d 1051, 201 Or. App. 188, 2005 Ore. App. LEXIS 1051
CourtCourt of Appeals of Oregon
DecidedAugust 10, 2005
Docket15-02-21858; A122931
StatusPublished
Cited by11 cases

This text of 117 P.3d 1051 (In re the Marriage of Branscomb) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Marriage of Branscomb, 117 P.3d 1051, 201 Or. App. 188, 2005 Ore. App. LEXIS 1051 (Or. Ct. App. 2005).

Opinion

SCHUMAN, J.

Wife appeals from a judgment dissolving the parties’ marriage. She assigns error to the trial court’s distribution of marital property and debts as well as its award of spousal support. On de novo review, ORS 19.415(3), conditioned by the guideline that we will not modify a trial court’s division of property unless we decide that “a different division is significantly preferable,” Shlitter and Shlitter, 188 Or App 277, 283, 71 P3d 154 (2003), we conclude that, in all of those respects, the trial court erred to wife’s disadvantage. We therefore modify the judgment accordingly.

I. FACTUAL BACKGROUND

A. The parties

At the time wife filed for dissolution, the parties were both 56 years old. During their 14-year marriage, wife stayed at home to care for the parties’ two sons, aged 12 and 24 at the time of dissolution. The older son was wife’s from a previous marriage, but he had been adopted by husband, and he lived at home until shortly before the dissolution. Wife has a master’s degree in creative writing and has worked sporadically as a self-employed editor, earning less than $3,000 per year. She continues to pursue her editing business and has unsuccessfully sought adjunct positions teaching English composition at the college and community college level.

Dining the first six years of marriage, husband suffered from chronic fatigue syndrome and was, for much of the time, unemployed. When he did work, he earned little; for a time he was a self-employed computer systems consultant, and he also started a business, which eventually failed. Both ventures generated significant debts. When his health improved, husband joined the University of Oregon as an adjunct lecturer, and he was later appointed to his present position as a full-time research assistant, earning $3,480 per month. Husband has also managed several jointly owned timber properties, discussed below, occasionally logging parts of the land for profit.

[191]*191B. The property

During the marriage, the parties jointly held four properties: a residence formerly owned by husband’s father in Canyonville; the marital residence; and interests in two parcels of land in Elkton, which we refer to as Elkton No. 1 and Elkton No. 2. The valuation of the residences ($55,250 and $139,458, respectively) is not disputed on appeal; rather, the appeal focuses on the Elkton properties.

Husband and wife jointly owned undivided interests in these parcels and disagree sharply concerning their value. The interests derive from purchases of timberland by husband’s brother Elbert, with husband’s help, near Elkton, Oregon, over several years prior to the marriage. By 1975, the brothers had acquired 135 acres of property in four parcels, together known as Elkton No. 1. Thereafter, the brothers purchased an undivided 25 percent ownership interest in a second parcel from third parties, the Galases. The Galases retained the remainder of the interest in the second parcel, Elkton No. 2.

When the parties married, Elbert held title to both of the Elkton properties. During the marriage, however, he transferred half of his ownership interest in the two properties to husband and wife. As a result, the parties jointly held a 50 percent undivided interest in Elkton No. 1 and a 12 1/2 percent undivided interest in Elkton No. 2. Husband, Elbert, and the Galases executed a partnership agreement governing the management of Elkton No. 2. The agreement permits logging only upon unanimous written agreement of the partners. Each partner is required to notify the others four months in advance if he or she intends to leave the partnership. Should that occur, the remaining partners then have the option to buy out the departing party. If no buyout is offered, the partnership would be dissolved, the entire parcel would be liquidated, and each partner would receive a share of the proceeds proportional to his or her percentage of ownership. A similar agreement governs the management of Elkton No. 1, only without the Galases as owner-participants.

The strategy for managing Elkton No. 1 and Elkton No. 2 is guided by efforts to preserve oak trees, sustain biodiversity, and minimize adverse effects on wildlife. Thus, the [192]*192parcels are not managed as commercial timber farms, although logging for profit, within the framework of the partners’ management strategy, has been conducted and continues to be permitted.

At trial, each party presented the testimony of a different appraiser concerning the value of the parcels, and each appraiser reached a different result and used a different methodology. Central to the dispute was whether the value of the interests should be discounted, that is, whether the appraisal should employ a minority discount to account for limitations on the control of the management of the parcels, and a marketability discount, based on decreased liquidity due in part to the joint ownership of the interests. See Tofte and Tofte, 134 Or App 449, 456 n 3, 895 P2d 1387 (1995) (explaining minority and marketability discounts).

Husband’s appraiser, Weathers, testified that Elkton No. 1 had a total fair market value of $380,000, and Elkton No. 2 had a total fair market value of $470,000. The total values took into account land use regulations, the availability of water, the presence of a salmon-bearing stream (which could have a negative impact on logging), and limited road access. Weathers then applied a 60 percent discount to the valuation of the parties’ minority shares in both parcels, reasoning that the value is decreased due to the restrictions on logging imposed by the agreements, and that common, undivided interests in timberland are less marketable. Weathers’s discounted appraisal was thus based on both minority control and marketability concerns. Accordingly, Weathers assigned a net value of $94,000 to the parties’ interests in both parcels.

Wife’s appraiser, Booth, valued the parties’ total interests in both parcels at $383,000. Booth did not apply a minority or marketability discount, although he acknowledged that common ownership can affect the value of a parcel.

In her proposed disposition, wife requested the marital residence and a portion of the parties’ ownership interest in Elkton No.l, which, she hoped, could be partitioned for immediate sale. Husband asked the court to award him the [193]*193Canyonville property and both parties’ interests in both parcels, so that he and his brother could continue to pursue their management goals and so that he could pass the shares on to his children.

The trial court adopted husband’s appraiser’s valuation, including his application of the discount, and also husband’s suggested disposition of the property. Husband was awarded the interests in the Canyonville property ($55,250) and in Elkton Nos. 1 and 2, as appraised by Weathers ($94,000), together totaling $149,250. Wife was awarded the marital residence ($139,458). An equalizing judgment of $5,000 from husband to wife resulted in each party receiving an award worth approximately $144,000.

C. The debts

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Cite This Page — Counsel Stack

Bluebook (online)
117 P.3d 1051, 201 Or. App. 188, 2005 Ore. App. LEXIS 1051, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-marriage-of-branscomb-orctapp-2005.