In the Matter of the Marriage of: Elvira Garibay & Christian Timothy Zegers

• Court: Court of Appeals of Washington
• Decided: April 4, 2024
• Docket: 39431-0
• Status: Unpublished

Opinion

FILED APRIL 4, 2024 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In the Matter of the Marriage of: ) No. 39431-0-III ) ELVIRA GARIBAY, ) ) Respondent, ) ) UNPUBLISHED OPINION and ) ) CHRISTIAN TIMOTHY ZEGERS, ) ) Appellant. )

LAWRENCE-BERREY, C.J. — Christian Zegers appeals the trial court’s property

award in this divorce action. We mostly affirm, but remand for the trial court to

apportion the consumer debt in a just and equitable manner.

FACTS

In 2020, Elvira Garibay petitioned the trial court to dissolve her marriage to

Christian Zegers. The couple had married in 2005 and separated for the final time in

2019. Before trial, the couple mutually agreed to a parenting plan for their two minor

children. No. 39431-0-III Marriage of Garibay and Zegers

Over the course of their marriage, Mr. Zegers had risen steadily in the consumer

loan origination and mortgage origination industries. For most of the marriage, he had

earned between $40,000 and $70,000 per year. However, in 2020, Mr. Zegers’ income

spiked to $147,685. Mr. Zegers attributed his increased earnings, in part, to depressed

interest rates resulting from the pandemic. When interest rates climbed near the end of

the pandemic, Mr. Zegers elected to return to the consumer lending industry. Ms.

Garibay over the course of the parties’ marriage had primarily worked as a stay-at-home

mother.

When asked at trial why she wished to dissolve her marriage, Ms. Garibay stated

that “the big [reason] was debt.” Rep. of Proc. (RP) at 119. In 2017, after returning from

a mission trip to Guatemala, Ms. Garibay learned that Mr. Zegers had opened a new line

of credit and charged nearly $3,000 to it in one week. Subsequently, Mr. Zegers

disclosed additional consumer debt to Ms. Garibay and eventually informed her that their

family was “living off of credit cards.” RP at 128.

The couple separated in 2017, but then reconciled and attempted to reduce or

consolidate their debt. To this end, the parties both liquidated Mr. Zegers’ retirement

account and took out a home equity line of credit (HELOC). With what remained of the

HELOC after satisfying debts, the parties undertook an extensive home renovation.

2 No. 39431-0-III Marriage of Garibay and Zegers

However, the community by 2019 had once more accrued considerable consumer debt.

The parties separated and Ms. Garibay filed for divorce.

Trial

This matter came to trial in October 2022. We organize the parties’ testimony at

trial around three issues raised in this appeal.

i. Ms. Garibay’s knowledge of debt

Ms. Garibay testified that she was unaware of the family’s consumer debt, as most

of the credit accounts in question were in Mr. Zegers’ name and as Mr. Zegers managed

the family’s finances. Ms. Garibay claimed not to have seen the couple’s credit card

statements. She also claimed not to have seen any statements during the pretrial phase,

though eventually she admitted the statements in question may have been obtained

through discovery and e-mailed to her.

Mr. Zegers conceded that many of the credit card statements came to his e-mail

only. However, he testified that Ms. Garibay had access to their joint statements via an

online portal.

ii. Nature of consumer debt

Without disputing the extent of the community’s debt, Mr. Zegers sought to

characterize that debt as benefiting the community rather than benefiting only himself.

To that end, Mr. Zegers presented Ms. Garibay with account statements and asked her to

3 No. 39431-0-III Marriage of Garibay and Zegers

identify any purchases that did not benefit the community. Ms. Garibay was unable to do

so. At one point, Ms. Garibay insisted a certain debt was Mr. Zegers’ own simply

because “he had the opportunity to pay the balance off and, instead, accrued other credit

card debt.” RP at 156.

Later in her testimony, Ms. Garibay stated that another credit card balance was

separate debt because Mr. Zegers had produced no statements to the contrary. On cross-

examination, Ms. Garibay testified, in her view, such a debt was separate—owing to

withheld statements—even if the balance in question had resulted from community

expenses:

Q. And you’re not disputing the fact that [these expenses] may have went to the benefit of the community; you’re just saying you didn’t know about [them]; therefore, some of [the debt] might be separate? A. So I don’t—for me, there was no reason to hide, and for me, it was an integrity thing. So when I would ask for statements, I wouldn’t get them. Q. So, again, to understand your reasoning . . . when you’re saying these things are separate, your rationale is the fact that you did not know they were happening; therefore, they are separate debts? A. Because of the history of lack of integrity.

RP at 165-66.

iii. Home valuation

In May 2021, Ms. Garibay responded to discovery questions by answering, in part,

that the value of their home was “[a]pproximately $180,000 in 2017—flooring and

4 No. 39431-0-III Marriage of Garibay and Zegers

electrical are unfinished.” Clerk’s Papers (CP) at 17. The parties obtained an appraisal

of their home that valued the property at $292,000 as of June 15, 2021. One day prior to

trial, Ms. Garibay informed Mr. Zegers that she would propose a $277,000 valuation in

lieu of that figure.1 Mr. Zegers brought a motion to exclude Ms. Garibay’s proposal,

which the trial court denied.

Ultimately, the court did value the home at $277,000. However, the court based

this valuation on a downturn in property values since the date of appraisal and not on Ms.

Garibay’s testimony. The court also noted that Mr. Zegers before trial had secured an

additional appraisal of the home, which he admitted had produced a valuation of less than

$292,000.

Dissolution order

The trial court dissolved Ms. Garibay’s and Mr. Zegers’ marriage and divided

their marital property. Although Mr. Zegers had offered to accept the entirety of the

community’s consumer debt in exchange for an offsetting share of the parties’ equity in

their home, the court instead awarded Mr. Zegers all the consumer debt without any

offsetting equity. Supporting this order was the court’s finding that Mr. Zegers was

1 At trial, Ms. Garibay also claimed that the parties’ home was worth only $230,000. However, this appears to have been either confusion or extemporaneous speculation on Ms. Garibay’s part. The valuation she requested in the joint trial management report was $277,000.

5 No. 39431-0-III Marriage of Garibay and Zegers

individually responsible for the community’s reckless spending. Specifically, the court

stated:

There was credible testimony at trial that a lot of marital discord involved [Mr. Zegers’] use of credit cards and [Ms. Garibay’s] position against debt. [Ms. Garibay] credibly testified that it was the biggest reason for the split, and the evidence supported [Ms. Garibay] being frugal in spending, living within her means and [Mr. Zegers] not sharing that trait, creating an ongoing cycle of debt.

RP at 227-28.

Instead of awarding Mr. Zegers an offsetting share of equity, the court awarded

him 40 percent of the equity while awarding Ms. Garibay 60 percent. The court noted

that Ms. Garibay’s increased share of equity would stand in lieu of maintenance, which

Ms. Garibay needed but Mr. Zegers could not afford. The court also awarded the parties

their separate vehicles—a 2017 Dodge Durango for Mr. Zegers and a 2017 Subaru

Legacy for Ms. Garibay—along with the loans attached to those vehicles.

Mr. Zegers timely appeals the trial court’s dissolution order and attendant

findings.

ANALYSIS

A. PROPERTY AWARD

Mr. Zegers argues the trial court erroneously considered his spending habits when

allocating the community’s debts because his spending on ordinary community expenses

6 No. 39431-0-III Marriage of Garibay and Zegers

did not rise to the level of waste. As explained below, we agree that the record is

insufficient to apportion all, or even a substantial portion, of the consumer debt to Mr.

Zegers.

Standard of review

We review a trial court’s division of marital property for abuse of discretion. In re

Marriage of Muhammad, 153 Wn.2d 795, 803, 108 P.3d 779 (2005). A trial court

operates within its discretion when its findings derive from the factual record, its

conclusions apply sound law, and its decisions are not manifestly unreasonable. In re

Marriage of Bowen, 168 Wn. App. 581, 586-87, 279 P.3d 885 (2012). Findings properly

derive from the factual record when they rely on substantial evidence. Sunnyside Valley

Irrig. Dist. v. Dickie, 149 Wn.2d 873, 879, 73 P.3d 369 (2003). Substantial evidence is

that “quantum of evidence sufficient to persuade a rational fair-minded person the

premise is true.” Id.

Breadth of discretion

Under RCW 26.09.080, a trial court must divide marital property in a manner that

“appear[s] just and equitable after considering all relevant factors.” Factors the court

must consider include (1) the nature and extent of community property, (2) the nature

and extent of separate property, (3) the duration of the marriage, and (4) the parties’

relative economic circumstances. RCW 26.09.080. Although the court may not consider

7 No. 39431-0-III Marriage of Garibay and Zegers

misconduct, it may consider which party’s “fiscal improvidence” undermined community

solvency and apportion property accordingly. In re Marriage of Steadman, 63 Wn. App.

523, 528, 821 P.2d 59 (1991); see also In re Marriage of Williams, 84 Wn. App. 263,

270, 927 P.2d 679 (1996).

Here, the trial court complied with RCW 26.09.080 when it properly considered

every factor outlined therein. The court noted the parties’ separate and community

assets, as well as the duration of the parties’ marriage. The court’s oral ruling

contemplated the parties’ economic circumstances at length. The court strove to

accommodate the parties’ financial challenges when it granted Ms. Garibay an extended

interval in which to refinance her home and when it awarded Ms. Garibay a

disproportionate share of the home’s equity in lieu of maintenance.

However, the trial court abused its discretion when it identified Mr. Zegers’

spending habits as a basis for assigning him the entirety of the community’s consumer

debt. Specifically, the court erred when it concluded that “evidence supported [Ms.

Garibay] . . . living within her means and [Mr. Zegers] not sharing that trait, creating an

ongoing cycle of debt.” RP at 227-28. Contrary to this finding, nothing in the record

suggests Ms. Garibay lived within her means. Similarly, the record does not suggest Mr.

Zegers “creat[ed] an ongoing cycle of debt” in defiance of Ms. Garibay’s better fiscal

habits. RP at 228. While Ms. Garibay may indeed have stated a “position against debt”

8 No. 39431-0-III Marriage of Garibay and Zegers

at trial, the evidence suggests that during the marriage, she depended on debt just as Mr.

Zegers did, and the debt in fact was incurred for the community. RP at 227.

Ms. Garibay argues that Mr. Zegers disproportionately facilitated the community’s

debt by charging joint and individual credit accounts. To support the conclusion that Mr.

Zegers was personally liable for these debts, however, Ms. Garibay would need to show

that his consumption drove the family’s debt, as distinct from the community’s

consumption. Mr. Zegers’ spending hardly may stand alone as his own “fiscal

improvidence” where that spending fed the community’s collective demands. Marriage

of Steadman, 63 Wn. App. at 528.

Ms. Garibay made no showing related to Mr. Zegers’ individual consumption.

Indeed, despite examining numerous credit card statements, both individual and joint,

Ms. Garibay failed to identify a single purchase Mr. Zegers made exclusively for himself

rather than for the family. When pressed as to why she believed a certain credit card

balance represented Mr. Zegers’ separate debt, Ms. Garibay only said, “Because [Mr.

Zegers] had the opportunity to pay the balance off and, instead, accrued other credit card

debt.” RP at 156. In other words, Ms. Garibay made no claim that Mr. Zegers

individually consumed the goods or services the credit card was used to purchase.

Other evidence also supports this inference. Indeed, the record furnishes ample

evidence that Ms. Garibay—along with Mr. Zegers—consumed resources at a pace that

9 No. 39431-0-III Marriage of Garibay and Zegers

outstripped the community’s means. For example, the community could not have

incurred any of the following expenses without Ms. Garibay’s tacit or explicit approval:

• 2017 Subaru Legacy. The record does not indicate when Ms. Garibay acquired

this vehicle, but it must have been between 2017 (the model year) and 2022,

when the divorce came to trial. Ms. Garibay was aware that Mr. Zegers in

2017 cashed out his retirement account in order to satisfy credit card debt. Ms.

Garibay also was aware the community took out an HELOC around this time

to pay off other credit card debt. The community in 2017 earned just $56,655.

Nevertheless—despite this modest income and despite the drastic measures the

community had just undertaken to satisfy previous debts—Ms. Garibay

evidently endorsed the purchase of a new or almost new vehicle.

• Home remodel. After the couple liquidated Mr. Zegers’ retirement fund and

took out an HELOC to satisfy credit card debt, Ms. Garibay agreed to use the

balance of their HELOC to renovate their home extensively. Ms. Garibay did

not testify as to any reservations about utilizing additional credit in this

fashion. In other words, Ms. Garibay agreed to take on additional

discretionary debt immediately after the couple undertook drastic action to

eliminate debt.

• Vacations. Mr. Zegers testified that Ms. Garibay used a credit card intended

10 No. 39431-0-III Marriage of Garibay and Zegers

only for emergencies to pay for hotel stays when she took the children on road

trips. Ms. Garibay did not contradict this testimony.

• Dominican Republic trip. In the midst of an expensive divorce that arose from

arguments over debt, Ms. Garibay agreed it was appropriate to fund a trip to

the Dominican Republic for the couple’s teenage daughter. Ms. Garibay

agreed to this expense despite testifying, about the condition of her family’s

home: “The kitchen is unfinished. I have holes in the floor and walls. There’s

electrical that needs to be done. The flooring needs to be put in. There are no

doors in my kids’s bedrooms. There are holes in their walls as well . . . .”

RP at 142. In other words, after taking out an HELOC to fund home

renovations, Ms. Garibay agreed to devote money to an international vacation

rather than investing in completing the renovations.

• Guatemala trip. Ms. Garibay testified that she first discovered Mr. Zegers’

questionable spending after she returned from a mission trip to Guatemala.

The record does not indicate whether or to what extent Ms. Garibay herself

funded the trip. However, to the extent Ms. Garibay made any contribution,

she did so during a year when her household’s income, for four people, was

$56,655.

11 No. 39431-0-III Marriage of Garibay and Zegers

Because the trial court’s finding that Mr. Zegers “creat[ed] an ongoing cycle of

debt” while Ms. Garibay lived within her means finds no support in the record, that

finding was in error. RP at 228. Because of this unsupported finding, the trial court

assigned all of the consumer debt to Mr. Zegers. We remand for the trial court to allocate

this debt in a just and equitable manner.

B. HOME VALUATION

Mr. Zegers argues the trial court impermissibly adopted Ms. Garibay’s tardily

disclosed valuation of the parties’ home where the only reliable evidence of valuation

was the June 2021 professional appraisal. We disagree with the premise of this

argument—namely, that the trial court adopted Ms. Garibay’s valuation.

The court in its oral ruling gave due weight to the June 2021 appraisal of

$292,000, which reflected a “snapshot in time.” RP at 222. The court’s analysis could

not stop there, however, since the trial occurred more than 15 months after the appraisal.

Citing language from the appraiser’s report, the court found that the June 2021 value

reflected a “red-hot seller’s market.” RP at 221. The court noted, “It’s common

knowledge that the real estate market has changed significantly since June of 2021. The

repeated and historical interest rate hikes this year have significantly cooled the housing

market.” RP at 222. In support of its valuation—which is about five percent below the

12 No. 39431-0-111 Marriage of Garibay and Zegers

June 2021 valuation-the court noted that Mr. Zegers probably did not submit his

updated valuation because it was lower than $292,000.

In short, the record does not support Mr. Zegers' view that the trial court relied on

Ms. Garibay' s tardily disclosed lay valuation. Rather, it relied on the professional

appraisal and evidence that real estate values were lower at the time of trial than when the

appraisal was performed. We see no abuse of discretion.

Affirmed in part and remanded for reapportionment of consumer debt.

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.

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WE CONCUR:

Fearing, J. Cooney, J.