Roberto-Santos v. Santos

Opinion

IN THE SUPERIOR COURT OF GUAM

2 DOMESTIC CASE NO. DM0608-10 PROFITA RITA SARMIENTO ,,,," t)r·~T

3 ROBERTO-SANTOS,

4 Plaintiff, FINDINGS OF FACT AND CONCLUSIONS OF LAW

5 AND FINAL DECREE OF DIVORCE vs.

6 KENNETH IGNACIO SANTOS 7 Defendant.

8

9

10 This matter came before the HONORABLE VERNON P. PEREZ on February 15, 2012 11 and February 17, 2012 at bench trial. Attorney Harold Parker represented Plaintiff, who was 12 present. Attorney DanielS. Somerfleck represented Defendant, who was present. On February 13 17, 2012, the Court granted Interlocutory Judgment of Divorce to Defendant. After having 14 heard the Parties' arguments, considering the Parties' pleadings and the record, the Court now

15 issues the following Findings ofFact and Conclusions of Law. 16 FINDINGS OF FACT 17 By a preponderance of the evidence, the Court makes the following findings of fact: 18 1. Any finding of fact is also a conclusion of law. Any conclusion of law is also a

19 finding of fact. 20 2. This matter arises out of a dissolved marnage between Plaintiff Profita Rita 21 Sarmiento Roberto-Santos (hereinafter "Plaintiff') and Defendant Kenneth Ignacio

22 Santos (hereinafter "Defendant"). 23 3. The Parties were married on November 25, 1988. The Parties separated on or about 24 July 10,2010. See Trial Transcript at 2:00p.m. on February 15,2012. 25 4. There are no minor children of the Parties. 26 5. Both Parties allege irreconcilable differences as grounds for divorce. 27 6. Both Parties suffer from significant medical conditions. See Trial Transcript. 28 7. During the marriage Plaintiffworked for Guam Telephone Authority (GTA). Id.

Roberto-Santos v. Santos, Findings of Fact and Conclusions of Law Domestic Case No. DM0608-IO -Page I of II 8. During the marriage Defendant worked for the Federal Civil Service as well as being 2 a member of the Guam Army National Guard. /d. 3 9. Plaintiff became too physically ill to continue working and fell under worker's

4 compensation for some time. /d. At some point thereafter, GTA attempted to 5 tem1inate the Plaintiff. Plaintiff fought the termination through the Civil Service 6 Commission (CSC), but was not reinstated until after GT A became a private entity. 7 10. The Retirement Fund denied a retirement package to Plaintiff because GTA was no 8 longer a Government agency. Eventually, Plaintiff was able to negotiate a settlement

9 with the Retirement Fund. I0 11. Defendant retired from the National Guard in 2004. Defendant continues to work at 11 Joint Regions Marianas at the Naval Station Police Department. /d. at 2:28p.m .. 12 12. After separation, Bank of Hawaii attempted to foreclose on the family home. The 13 family home was built by the Parties during the marriage on land that was previously 14 gifted to the Plaintiff. After separation, Plaintiff made payments on the mortgage

15 with family gifts. 16 13. Plaintiff was able to save the family home from foreclosure by usmg funds she 17 received from a negotiated lump sum settlement with the Retirement Fund. See Trial

18 Transcript at 3:17p.m .. 19 14. The Parties have two motor vehicles including a 2005 Toyota RA V 4 and a 1998

20 Nissan Frontier. 21 15. During the marriage and after separation, Defendant has paid and kept current

22 medical insurance for Plaintiff. 23 16. Other property of the marriage includes: household items, tools, equipment, 24 sentimental dolls, a 2009 tax refund, Defendant's Thrift Savings Plan, Defendant's 25 Guam Army National Guard Retirement Pension, Defendant's Department of Defense 26 (DOD) Retirement Pension and Plaintiffs GTA Retirement Benefits.

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CONCLUSIONS OF LAW

2 17. Plaintiff and Defendant have been residents of Guam for more than ninety (90) days 3 in satisfaction of 19 GCA § 8318(a). This Court has jurisdiction pursuant to 7 GCA 4 §§ 3105 and 4101 and 19 GCA Ch. 8. 5 18. Grounds for Divorce 6 The Divorce is granted to Defendant on the basis of irreconcilable differences.

7 19. Standard 8 The standard and law governing divorce is discussed in the section below. Separate

9 property means property acquired by either spouse before marriage or after entry of a 10 decree of dissolution of marriage or earnings of a spouse while living separate. 19 11 GCA § 6101. Property is classified as separate or community based upon when it is 12 acquired. Id.; In re Marriage of Moore, 28 Cal.3d 366, 370 (Sup.Ct.Cal.1980); 13 Fisher v. Fisher, 383 P.2d 840, 842-43 (Id.Sup.Ct.1963); Hollingsworth v. Hicks, 258 14 P.2d 724, 729-30 (N.M.Sup.Ct.1953); Lawson v. Ridgeway, 233 P.2d 459, 464 15 (Ariz.Sup.Ct.l951); Smith v. Smith, 685 So.2d 649,651-52 (La.Ct.App.lst Cir.1996); 16 In re Marriage of Harrington, 935 P.2d 1357, 1365 (Wash.App.Div.1 1997); and 17 Scott v. Estate ofScott, 973 S.W.2d 694, 695-96 (Tex.App.El Paso 1998). Pursuant 18 to the Guam Supreme Court's ruling in Rinehart v. Rinehart, enhancement to separate 19 property or debt will allow the community to seek reimbursement for community 20 funds contributed during the marriage towards that asset. Rinehart v. Rinehart, 2000 21 Guam 14, ,,19-21 (Sup.Ct.Guam 2000). The Supreme Court of Guam has extended

22 the Rinehart ruling to apply to both assets and debt in Navarro v. Navarro, again holding that "absent proof of the enhancement of a spouse's separate property, there

24 should be no reimbursement to the community." Navarro v. Navarro, 2000 Guam 25 31, ,16 (Sup.Ct.Guam 2000). The formula used by the Supreme Court of California 26 grants the non-owning spouse a pro tanto community share in the equity or capital 27 appreciation of the home as enhanced by community payments made to the principal 28 owed on the mortgage, based on the real property's appraised value. In reMarriage

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of Moore, 28 Cal.3d 366, 370-71, 373-74 (Sup.Ct.Cal.1980).

2 The formula used to compute the community pro tanto share in the 3 Moore case is called the Lucas/Aufmuth formula and requires the court to first 4 determine the separate property percentage interest by crediting the separate property 5 with the down payment and full amount of the loan or the original value of the 6 contributed separate property, minus the amount by which the community payments 7 reduced the principal balance of the loan. Under Guam law, community property is 8 different than community debt. Compare 19 GCA § 61 01 with 19 GCA § 61 02. 9 Loans acquired during a marriage constitute community debt. 19 GCA § 6102 states: 10 "(b) Community debt means a debt contracted or incurred by either or both spouses II which is not separate debt." The Supreme Court of Guam has determined that it is 12 not the burden of the trial court to find or show valuation, that burden lies with the 13 parties. Navarro v. Navarro, 2000 Guam 31, ~9 (Sup.Ct.Guam 2000). As aptly 14 stated by the Supreme Court of Guam, "[one party]" bore the burden of establishing 15 the value of community property at trial, where he failed to provide or contest 16 valuation, the trial court was well within its discretion to accept the values provided 17 by [the opposing party]." Id. at ~11. As stated by the Moore court, this method of 18 using capital appreciation and equity best credits the amount given from separate 19 property for the original contribution, and best credits the role the original separate 20 asset played in creating the equity in the home/real property. In re Marriage of 21 Moore, 28 Cal.3d 366, 374 (Sup.Ct.Cal.1980). 22 Under 19 GCA §8411 (b) and Sinlao v. Sinlao, 2005 Guam 24, ~23 23 (Sup.Ct.Guam 2005), the Court is required to strive to divide the community property 24 equally between the parties whenever possible. In this case, the Court was presented 25 with evidence of the existence of community property and community debt. 26 27 28

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20. Distribution

2 The Court must strive for equal distribution in this matter. 19 GCA § 8411. The 3 Court has broad discretion in distributing community property such that the total 4 distribution is equal. Sinlao v. Sinlao, 2005 Guam 24, ,-r23 (Sup.Ct.Guam 2005). 5 A. GT A Pension 6 Plaintiff worked at GTA during the marriage and made contributions to a 7 Government of Guam retirement pension plan. See Trial Transcript at 8 2:07p.m.. Normally, that pension would be community property according to 9 the formula used in Moore. Yet, there is an unusual history with Plaintiff's 10 retirement from GT A. First, the pension came through a lump sum settlement 11 with the Retirement Fund. Furthermore, Plaintiff took out from her 12 retirement early, which dramatically reduced the value. Defendant has argued 13 that an equal distribution would be to grant the entire GT A pension as 14 Plaintiff's separate property and to do the same for Defendant's Civil Service 15 retirement package. Defendant argues that the rationale for such a facially 16 unequal distribution would be that Plaintiff used the GTA retirement package 17 she earned for her sole benefit. Defendant is persuasive on this issue. The 18 Court concludes that Plaintiff's GT A retirement package will be distributed 19 solely to Plaintiff.

20 B. National Guard Pension 21 Defendant concedes that his Department of Defense retirement pension is

22 community property. The Court will distribute the pension according to 23 Defendant's years of service during the marriage. Plaintiff maintains a one- 24 half interest in Defendant's retirement pension according to the ratio (months 25 of service during marriage/ total months of service). 26 C. Civil Service Pension and Thrift Savings Plan 27 Defendant argues that his Civil Service retirement pension, coupled with a 28 thrift savings plan, be deemed his separate property and that Plaintiff's GT A

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retirement package also be deemed Plaintiffs separate property, as explained 2 above. The Court already found this distribution to be equal. The Court 3 finds, that the civil service retirement pension and thrift savings plan will be 4 distributed to the Defendant. As support to this conclusion, the Court 5 recognizes that Defendant used his thrift savings plan as collateral to a car 6 loan. The Court does not find that the car loan is a community debt. The 7 Court finds that the RA V 4 loan remains with Defendant as the thrift savings 8 plan is solely Defendant's property. 9 D. Family Home 10 Defendant asks that the family home, located at 441 Sgt. E. Cruz St. in Santa 11 Rita within the Territory of Guam, be sold to pay the community mortgage 12 and other community debts. Plaintiff received the land upon which the house 13 sits via gift. The underlying land is Plaintiffs separate property, which 14 Defendant concedes. The house itself was built during the marriage from a 15 mortgage taken out during the marriage. 16 Plaintiff has agreed to hold Defendant harmless on the remaining

17 mortgage if the house is distributed solely to her. The Court finds that both

1

18 the mortgage and the home are Plaintiffs separate property . Title 19 GCA §

19 8411 (c) grants the court the discretion to award a community property home 20 to either spouse or to divide the homestead by sale or some other method. In 21 essence, the Court will assign Defendant a reimbursement for community 22 assets used to buy the home in order to allow Plaintiff to keep the family 23 home. Defendant has suggested that the family home IS worth roughly 24 $345,000.00 and submitted an appraisal that the home IS worth roughly 25 $272,000.00. See Appraisal Prepared for Defendant. Plaintiff suggests the 26 home is worth about the same as the mortgage of roughly $127,000.00 and 27 submitted an appraisal suggesting the home is worth $166,000.00. See 28 The marital funds used to build the home on Plaintiffs separate property improved the property significantly.

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Appraisal prepared for Plaintiff. The Court is not confident in either Party's 2 valuation of the family horne as there is such a vast difference amongst the 3 appraisals submitted. As a result, the Court will accept a valuation that the 4 Court deems correct from the record. The Court values the family home at 5 $219,000.00 based on the two appraisals and the current condition of the 6 horne as testified to at trial. The Court finds that Defendant being released 7 from the mortgage will have equal distribution value to Plaintiff being granted 8 sole owner of the land and home as long as there is a reimbursement to 9 Defendant of his share of the community assets used to improve the Plaintiffs 10 separate property land. The mortgage on the horne is a liability in the amount 11 ofroughly $127,000.00. See Testimony of Plaintiff as Bench Trial. Thus, the 12 value of the current horne is roughly $92,000.00 more than the mortgage. 13 That $92,000.00 value is an improvement on Plaintiffs separate property. 14 As the value of the horne is worth $92,000.00 more than the 15 mortgage, that $92,000.00 is reimbursable asset. Thus, the Court will assign 16 both the liability of the mortgage and the asset that is the home and land to 17 Plaintiff. But, to make the distribution equal, the Plaintiff will be obligated to 18 return Defendant community property share of the reimbursement to the 19 community. Therefore, Plaintiff will owe Defendant $46,000.00 to make the 20 distribution equaL 21 E. Bank of Hawaii Mortgage 22 As explained above, the Mortgage is Plaintiffs sole debt. 19 GCA § 61 02(b ). 23 F. The Family Vehicles 24 During the marriage, Parties acquired a 2005 Toyota RAV 4 and a 1998 25 Nissan Frontier. Both vehicles are community property and the Court will 26 assign the vehicles such that equal distributions take place. The Court 27 concludes that each Party may retain the ownership of the vehicle that is 28 currently in their possession.

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G. Sentimental Items

2 There was testimony of dolls and cultural items that have no monetary value 3 but are high in sentimental value. Plaintiff will be allowed to retain her 4 collection of dolls and any sentimental items she currently possesses. 5 Testimony was given as to an ancient Chamorro rock that has high 6 sentimental value. Id at 3:37p.m.. The cultural rock will remain with the 7 Party currently in possession of it. There was also testimony of a coin 8 collection with low monetary value. The Court will distribute the collection 9 to the currently possessing Party. 10 H. Household Items and Appliances 11 The Parties have presented evidence that household items were taken from the 12 home and either sold or remain in the separate possession of one of the 13 Parties. Plaintiffs sister testified to the missing items and Defendant 14 admitted to taking and selling items from the home for medical reasons. See 15 Trial Transcript. The Court did find adequate evidence presented that would 16 warrant reimbursement for any household items no longer within the 17 possession of either Party. 2 Some items are missing that are not accounted for 18 and the valuation for these items is difficult to ascertain. Any item now in the 19 sole possession of a Party shall be deemed their separate property. Yet, for 20 the items sold off by Defendant that are unaccounted for, the Court will 21 require a reimbursement to the community of $5,000.00. Thus, Defendant 22 should pay to Plaintiff $2,500.00 for her share of the community assets 23 misappropriated by Defendant. 24 25 26

27 Strong and adequate evidence was presented that indicated misappropriation by the Defendant for valuable household items. The Court also heard evidence that any money attained from the sale of those items went to Defendant"s medical costs. The Court finds that Defendant should reimburse the community for any items taken and used for medical reasons before or after the date of separation. The Court tincts that those item.

28 were very difficult to value, but concludes that $5,000.00 is an appropriate amount

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I. Yard Work Equipment and Tools 2 The Court finds that the same analysis used in the above section applies to all 3 yard equipment and tools. 4 J. 2009 Tax Refund 5 There is a presumption that income received during the marnage 1s 6 community property. Where a tax refund is returned to the Parties after taxes 7 paid jointly during the marriage, the refund must also be community property. 8 No exception applies here and the Court concludes that the 2009 Tax Refund 9 is community property and should be distributed evenly to both Parties. 10 K. FGLI Life Insurance II Any life insurance policy being paid for by a Party to the benefit of another 12 Party may discontinue. 13 L. Master Card Debt 14 There is a presumption that debt incurred during the marriage is community 15 debt. No exception applies here and the Court concludes that the credit card 16 debt incurred during the marriage is a community debt. Both Parties are 17 responsible for this debt. The Court finds that any debt incurred during the 18 marriage not directly mentioned in these findings is community debt. 19 M. Legal Fees Debt 20 There is also a debt owed to the Brooks Law Office. The debt was incurred 21 during the marriage and by operation of statute; it should be classified as 22 community debt. Both Parties are responsible for the Brooks Law Firm debt. 23 N. RAV4Loan 24 There is a loan attached to the Toyota RA V 4. As collateral to the loan, 25 Defendant's thrift savings plan was made liable to the loan. The Toyota RA V 26 4 is now separate property belonging to the Plaintiff because it is in her 27 possession, but the loan will remain with Defendant as he is keeping the thrift 28 savings plan as his separate property.

Roberto-Santos v. Santos.

Findings of Fact and Conclusions of Law Domestic Case No. DM0608-I 0 - Page 9 of II -

21. Separate Maintenance

2 A spouse may be entitled to maintenance under 19 GCA § 8402. Plaintiff asks the 3 Court to order that Defendant continue paying for Plaintiffs health insurance. The 4 Court finds this to be a proper request as Defendant continues to be able to make a 5 living while Plaintiff suffers from physical ailments preventing her from working. In 6 addition, Defendant provided financial support for the Plaintiff during the lengthy 7 marriage that Plaintiff became accustomed to. Specifically, Defendant paid for health 8 insurance for Plaintiff during the marriage that Plaintiff continues to rely on. See 9 Trial Transcript at 3:08p.m.. The Court will order that Defendant continue paying for I0 Plaintiffs health insurance, which is a substantial amount, in lieu of additional II spousal support until Plaintiff is remarried or for ten (1 0) years, whichever comes 12 first. See 19 GCA § 8405. Even if Defendant is unable to continue health insurance 13 for Plaintiff through his work benefits, he will be obligated by this decree to support 14 Plaintiff by paying for her health insurance as long as that insurance is reasonable. 15 22. The Court also finds that Plaintiff must reimburse Defendant $46,000.00 for his 16 share of the community property used to build the family home. That amount will be 17 offset by the reimbursement owed to Plaintiff of $2,5000.00 for the misappropriated 18 goods. Thus, Plaintiff must pay to Defendant $43,500.00. The Court will allow 19 Plaintiff some time to find assistance to pay the reimbursement, but the Court 20 understands the financial situation the Plaintiff is in. Therefore, if Plaintiff is unable 21 to begin making payments to the reimbursement, the Plaintiff will also be given the 22 option to sell the home and provide Defendant with his share of the proceeds. In sum, 23 the Court will grant Plaintiff the option of selling the home, discontinuing the 24 separate maintenance of ten years, releasing a portion of her right to Defendant's 25 National Guard Retirement or finding another way to make regular payments to

26 Defendant to equalize distribution. 3

27 These options are only suggestions. If the Parties can develop some other way so that Defendant is paid his proper 28 reimbursement, the Court is inclined to allow Plaintiff to keep her land.

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23. The Court finds that the overall distribution of assets and liabilities in this matter is

2 equal. 3 ORDER 4 24. This is a final judgment of divorce, the Parties are no longer husband and wife and 5 either can remarry in Guam or anywhere upon issuance of this Decree. 6 So ORDERED this'lk_ day of March, 2013.

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9 H ORABLE VERNON P. PEREZ

10 JUDGE, SUPERIOR COURT OF GUAM 11

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