In re the Marriage of Marzetta

120 P.3d 75, 129 Wash. App. 607
Court of Appeals of Washington·Decided April 21, 2005·No. No. 22389-2-III·Published·Cited by 15 cases

Opinion

f 1 Allan and Kelly Marzetta were married for 13 years. At the time of the marriage, Mr. Marzetta owned substantial assets and operated his own company. When the couple divorced, the trial court was faced with the daunting task of dividing the parties’ assets, setting the amount of child support for their three children, and determining Ms. Marzetta’s need for an award of spousal maintenance. Both parties appeal. Ms. Marzetta challenges the trial court’s decision, asserting the court (1) mis-characterized Mr. Marzetta’s bonuses as separate property and (2) awarded an inappropriately low amount of child support given Mr. Marzetta’s substantial wealth and income. Mr. Marzetta challenges the court’s decision to grant an award of maintenance, asserting that the award [612] was not justified in view of Ms. Marzetta’s assets and lack of financial need. Additionally, he contends the court abused its discretion by requiring spousal maintenance to be paid for 20 years.

Kurtz, J.

[612] ¶2 On appeal, the essence of Mr. Marzetta’s argument is that the monies he received from his separate property— whether denominated salary or bonus — greatly exceeded the value of his labor or skill. Consequently, he asked the court to assign a reasonable value to his labor, which would be community property, and to assign another value to the remainder, which would be separate property. He urges the court to distinguish between his duty to pay a reasonable amount for his services and his right to the proceeds of his separate property. He bases this argument on the parties’ prenuptial agreement.

¶3 During the marriage, the business controlled by Mr. Marzetta paid bonuses to him. He used this income to purchase property. The trial court characterized both Mr. Marzetta’s bonuses and the property he purchased with these bonuses as his separate property. Because we conclude Mr. Marzetta’s bonuses were community property, we reverse the trial court’s property division. Because the trial court was required to consider the division of property when determining maintenance, we reverse the trial court’s award of maintenance. Finally, we conclude that the trial court did not abuse its discretion in its calculation of child support. We remand for further proceedings regarding the trial court’s division of property and award of maintenance consistent with this opinion.

FACTS

¶4 Allan and Kelly Marzetta married on March 5, 1988. At the time of their marriage, Mr. Marzetta owned his own company, Altek Machine & Molds, Inc., and had accumulated some wealth. In contrast, Ms. Marzetta had been working as a travel agent and had little income and no wealth. The couple has three children. Mr. Marzetta also has three children from his first marriage.

[613] ¶5 Prior to their marriage, the parties signed a prenuptial agreement. Neither party challenges the validity of the prenuptial agreement. Both parties were represented by competent counsel when the agreement was negotiated and signed.

¶6 The prenuptial agreement discloses that, at the time of the marriage, Mr. Marzetta had a net worth of $2,900,000 and received rental income of approximately $5,000 per month attributable to property he owned on Appleway and Mission Avenues.

¶7 The parties dispute the court’s characterization of transactions involving property on Sullivan Road, Apple-way properties, Marzetta Limited, and Anchorage Associates — as well as the court’s award of child support and spousal maintenance.

¶8 Sullivan Road Property. In 1989, the Marzettas purchased property on Sullivan Road, where they eventually constructed their residence. In 1990 and 1991, Altek bought the adjacent pieces of property. Later, Mr. Marzetta purchased these properties from Altek. The source of the money for the purchase was Altek. Mr. Marzetta states the first payment was made with a 1994 year-end bonus and that the second payment was made with a 1995 mid-year bonus. Mr. Marzetta chose to take the money as bonuses, rather than stock dividends, to avoid double taxation.

¶9 Later, Mr. Marzetta purchased an additional parcel of property on Sullivan Road. The downpayment was paid for by a bank account that held contract receivables for the Frislie/Screen Tek sale. The parcel was paid off with a $109,000 bonus from Altek.

¶10 After these properties were purchased, Mr. Marzetta obtained quitclaim deeds from Ms. Marzetta transferring all of her interest in the properties to him. He did this on the recommendation of his attorney, Robert Lamp. Mr. Lamp believed that there might be an issue regarding whether Ms. Marzetta had a community property interest in the property. According to Ms. Marzetta, neither Mr. [614] Lamp nor Mr. Marzetta told her that she might be conveying community property to Mr. Marzetta. Mr. Lamp had previously prepared a will for Ms. Marzetta. In this instance, he was representing Mr. Marzetta’s interest against Ms. Marzetta’s interest.

¶11 The trial court determined that these properties were Mr. Marzetta’s separate property even though they were purchased primarily with bonus income rather than stock dividends.

¶12 Appleway Properties. During the marriage, the parties also acquired commercial property on Sullivan Road, consisting of parcels C, D, E, and F. When acquiring these properties, Mr. Marzetta received a check from Altek, deposited the check into his personal account, and then purchased the property with a check from this account. Mr. Marzetta later decided to build on the property and took another personal loan from Altek to construct a building. He then wrote personal checks to the contractors. Later, Mr. Marzetta paid off the loans with bonus money of $589,780, a dividend payment of $454,000, and a loan. Subsequently, Mr. Marzetta transferred the debt obligation to Marzetta Limited Partnership.

¶13 At the time of trial, Mr. Marzetta owned parcels C, D, and E of the Appleway property, which were valued at $730,000. Parcel F, which contains the building, is owned by Marzetta Limited Partnership. The value of this property is $5.5 million. Marzetta Limited is owned 40 percent by Mr. Marzetta and 60 percent by his six children.

¶14 Ms. Marzetta executed a quitclaim deed transferring her interests in these properties to Mr. Marzetta. Mr. Marzetta considered these properties and the building to be his separate property because they were part of Altek — and he never wanted anyone to have an ownership interest in Altek except his children. Mr. Marzetta acknowledged that Ms. Marzetta understood the property to be his separate property and that she signed the deeds on this basis.

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In re the Marriage of Marzetta, 120 P.3d 75, 129 Wash. App. 607 (Wash. Ct. App. 2005).

120 P.3d 75 (In re the Marriage of Marzetta) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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