Opinion
Nos. 47797-8-I c/w 48551-2-I.
Filed: June 10, 2002. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION.
Appeal from Superior Court of King County, No. 97-3-09373-6, Hon. Stephen G. Scott, November 13, 2000, Judgment or order under review.
Counsel for Appellant(s), Edward M. Lane, Smith Alling Lane P.S., Suite 403, 1102 Broadway, Tacoma, WA 98402-3526.
Michael S. Pecherer, 2121 North Calif. Blvd, Suite 875, Walnut Creek, CA 94596.
Counsel for Respondent(s), Peter Yoakum (Appearing Pro Se), 10899 N.E. Bill Point Dr, Bainbridge Is, WA 98110.
Catherine W. Smith, Edwards Sieh Smith and Goodfriend, 701 5th Ave Ste 7170, Seattle, WA 98104.
In consolidated appeals involving the dissolution of her marriage to Peter Yoakum, Kimberly Yoakum appeals from two orders. One, a deferred parenting plan, designates Peter Yoakum as the primary parent.
To avoid confusion, we refer to each Yoakum by their first names. No disrespect is intended.
The other denies Kimberly's CR 60(b) motion to vacate the property distribution based on her allegations that Peter misrepresented tax liabilities at trial. We affirm both orders. A court acting in equity may defer the final parenting decision to determine whether parents will improve behavior that is adversely affecting the children. And a court may refuse to reopen an order distributing marital property where the alleged concealment involves valuations that each spouse had the opportunity to investigate. Kimberly and Peter married in 1986. They had three children. In 1997, they relocated with their children to Michigan. Shortly thereafter, Peter returned to Seattle and filed for dissolution. The children remained with Kimberly in the family home in Michigan. Peter lived on a sailboat in Seattle.
In February 1999, the trial court entered a parenting plan as part of its order of dissolution. The plan designated Kimberly as the primary parent. But the court found that both parents had significant issues to address, such as Peter's living conditions and Kimberly's anger management. The court included a review provision in the parenting plan to determine whether the parents had addressed these concerns and whether the plan would continue to serve the best interests of the children.
The plan called for two reviews to be held on or after July 1999 and January 2000. The first review occurred in August 1999. The court did not make any changes to the parenting plan after the first review. The second review occurred in June 2000. On the second review, the court found that Peter had addressed the concerns expressed about his parenting ability in the initial order by acquiring an acceptable house for the children and undergoing therapy. Kimberly, on the other hand, had failed to get therapy to address her anger issues and continued to include the children in her fights with Peter.
Based on these circumstances, the court designated Peter as the primary parent in its 2000 Parenting Plan. The court concluded that the mother's failure to get therapy had affected the children negatively and it was in their best interests to live with Peter. Kimberly appeals. An appellate court reviews the trial court's rulings on residential provisions in a parenting plan for an abuse of discretion. In re Marriage of Littlefield, 133 Wn.2d 39, 46, 940 P.2d 1362 (1997). A trial court abuses its discretion only if its decision is manifestly unreasonable or based on untenable grounds. Littlefield, 133 Wn.2d at 46-47. Because of the trial court's unique opportunity to observe the parties, the appellate court should be "extremely reluctant to disturb child placement dispositions." In re Parentage of Shroeder, 106 Wn. App. 343, 349, 22 P.3d 1280 (2001) (quoting In re Marriage of Schneider, 82 Wn. App. 471, 476, 918 P.2d 543 (1996)).
Initially, Kimberly contends that a trial court may not defer the final designation of the primary parent in a parenting plan to a future review hearing. However, this court has recently held that, under its equitable powers, a superior court has the authority to defer the final parenting decision. [W]here the best interests of the child requires it, the trial court is not precluded by the Parenting Act from exercising its traditional equitable power derived from common law to defer permanent decision making with respect to parenting issues for a specified period of time following entry of the decree of dissolution of marriage.
In re Marriage of Possinger, 105 Wn. App. 326, 336-37, 19 P.3d 1109, review denied, 145 Wn.2d 1008, 37 P.3d 290 (2001). In so holding, the Possinger court noted that the exercise of such authority will be used sparingly because of the strong presumption favoring the finality of parenting plans. Possinger, 105 Wn. App. at 337.
In Possinger, both parents sought custody of their daughter. At the time of trial, the father was a full-time law student and the mother worked a 3:30 p.m. to 11 p.m. shift at a hospital. The parents had been sharing parenting duties due to their work and school responsibilities. The trial court noted the transitional nature of the parents' respective situations.
The court entered a temporary parenting plan, but deferred entering a final parenting plan subject to a review hearing. A year later, the parents had changed their living situations and the mother had adjusted her work schedule to days. The court entered a permanent parenting plan designating the mother as the primary parent. The father appealed. This court affirmed the trial court's equitable authority to defer entry of a final parenting plan because the best interests of the children standard is the paramount policy underlying the Parenting Act, RCW 26.09 et seq. Possinger, 105 Wn. App. at 336. To construe the Parenting Act to require a court to enter a final parenting plan where it would not serve the best interests of the children would undermine this policy. Possinger, 105 Wn. App. at 336.
Here, the trial court found that the children had been `harmed by the adversarial nature of the relationship between the parents. Both parents have demonstrated themselves to be self-absorbed and needy. Both parents must change if their children are to thrive.' The court also found that the mother had a `serious problem controlling her anger' and there was a risk `that the mother will not be able to tolerate the children asserting their independence.' Based on these findings, the strong presumption favoring the finality of a parenting plan would not have served the best interests of the children because both parents were engaged in behavior that was harmful to the children. The court's decision to defer the imposition of a permanent parenting plan was in this situation an appropriate exercise of its equitable duty to treat the interests of the children as paramount.
Clerk's Papers at 45.
Clerk's Papers at 45.
Kimberly argues that the final parenting plan was in fact a modification of the plan the court originally entered. She argues that under the parenting plan modification statute, RCW 26.09.260, the court was required to make the threshold finding of a substantial change in circumstances that affects the children's best interests. However, as we held in Possinger, where a court defers the formulation of the placement plan under its equitable powers, the deferred plan is considered under the general criteria for entering a parenting plan contained in RCW 26.09.187. Possinger, 105 Wn. App. at 337. The deferred decision is not a modification under RCW 26.09.260. Possinger, 105 Wn. App. at 337.
Therefore, the trial court was not required to find that a significant change of circumstances had occurred. Kimberly also argues that the trial court abused its discretion by applying two impermissible theories in determining the residential placement of the children. She contends that the trial court relied on the `friendly parent' concept or, alternatively, the `reward and punishment' theory. Under the `friendly parent' concept, primary residential placement is awarded to the parent most likely to foster the children's relationship with the other parent. A trial court's use of the concept in custody determination is an abuse of discretion. Lawrence v. Lawrence, 105 Wn. App. 683, 688, 20 P.3d 972 (2001).
In Lawrence, the mother appealed an order granting custody of the children to the father and argued that the trial court relied on the `friendly parent concept.' The appellate court held that the trial court's findings were insufficient to determine what the court had considered in entering the custody order and remanded the case for the entry of findings and conclusions without the use of the friendly parent concept. The Lawrence court noted that the Washington Legislature has repeatedly declined to determine that `frequent and continuing contact with both parents is in the best interests of the child.' Lawrence, 105 Wn. App. at 687 (quoting Littlefield, 133 Wn.2d at 48-49). The court concluded that because the `friendly parent' concept was not the law of the state, a trial court's use of the concept in a custody determination would be an abuse of discretion. Kimberly, in arguing that the court relied on the `friendly parent' concept, indicates two statements made by the court. First, in finding of fact 2.6, the court stated:
The mother has substantially interfered with the relationship between the children and their father. If the children were left in the mother's care, this interference would likely continue, until the father no longer was able to have a relationship with the children.
Second, the court stated in its oral decision a belief that `to leave the children with Ms. Yoakum as the primary parent, in the long run it is very unlikely that Mr. Yoakum would have any such relationship with his children.'
Viewed as a whole, however, the record demonstrates that the trial court based its decision on the best interests of the children. The court stated in its oral decision that the mother's continued involvement of the children in her conflict with the father affected the children:
[A]ll of the mother's strengths in terms of her being the primary parent and her warm and loving and nurturing and strongly bonded relationship with her children obviously cuts in favor at the time of the original decision and still cuts in favor of the mother remaining the primary parent. The problem, both at the time of trial and at the time of my original decision and yet now, is that there is a strongly competing factor. And that is the substantial interference in the children's ability to have the same kind of a relationship with their father, even given the distance, as they have with their mother, given the mother's problems with anger and animosity and her inability to separate the kids from the conflict, in fact, her involvement of the children in the conflict.
. . .
. . . But she has not obtained the kind of therapy for herself that she so desperately needs. She has no appreciation of the problems that she has in dealing with this matter. And it has had serious detrimental effects for these children in the way of their unfortunate involvement in this conflict.
The court's focus on the best interests of the children is further reflected in its written findings. The court found, for example, that Kimberly involved the children in the legal proceedings and in her conflicts with Peter, to their detriment.
Because the record sufficiently demonstrates that the trial court based its residential placement decision on the best interests of the children and did not base its award on who was the parent most likely to foster the children's relationship with the other parent, we find no abuse of discretion. Kimberly alternatively contends that the trial court impermissibly designated Peter as the primary parent in order to reward Peter for getting counseling and a house and to punish Kimberly because she had not complied with the court's previous order. In its oral decision, the court ruled that based on the compliance of Mr. Yoakum with the conditions set by this Court, the noncompliance with the conditions set by the Court by Ms. Yoakum, that it is in these children's best interests that Mr. Yoakum be designated the primary parent.
This ruling is reflected in the court's findings of fact 2.3, 2.4, and 2.7, where the court found that Peter had made `substantial good faith efforts to comply with the Parenting Plan' while Kimberly had not:
He has refrained from the abusive use of conflict. He has not involved the children in the legal proceeding. In fact, he consciously attempted to remove the children from the conflict relating to the legal proceeding.
The father has attempted to put the needs of the children ahead of his own needs.
The mother has not substantially complied with the 1999 Parenting Plan. She did not immediately enter into personal therapy. She did not submit to a medical evaluation regarding her emotional condition. She did not enter into an anger management program. She did not participate in a Divorce Lifeline workshop for parents, or its equivalent. She discussed her problems with the father in front of the children. She involved the children directly in the legal proceeding. She significantly delayed placing the children in therapy, and then she selected a therapist recommended by Dr. Spahn, instead of a therapist recommended by the school as required by the 1999 Parenting Plan. The attempts that the mother made to comply with the 1999 Parenting Plan were not made in good faith to address the problems that needed to be addressed. Rather, the attempts that the mother made to comply with the 1999 Parenting Plan were made for litigation purposes only.
The children have a great need to be left out of the conflict between the parents. That need will not be satisfied if the children are left in the mother's primary care.
In determining the placement of the child, a court may not consider the conduct of a parent that does not affect the welfare of the child. Schuster v. Schuster, 90 Wn.2d 626, 630, 585 P.2d 130 (1978). Here, the court found that the children were affected by Kimberly's failure to get therapy and to learn how to control her anger. She does not challenge this finding. Unchallenged findings are verities on appeal. Matter of Estate of Lint, 135 Wn.2d 518, 532-33, 957 P.2d 755 (1998). We find no abuse of discretion because the trial court considered Kimberly's failure to comply with court orders only insofar as it affected the children.
In summary, we find no error in the trial court's decision to designate Peter as the primary residential parent. Kimberly also argues error arising from the property division phase of the trial. The court assigned Peter the responsibility of paying off the tax liabilities of the marriage, and awarded him a corresponding offset in marital property. In a post-trial motion to modify the property distribution under CR 60(b)(4) (fraud, misrepresentation, or other misconduct), Kimberly contended that Peter had deliberately overstated the Yoakums' tax liability in order to gain advantage in the property distribution. She assigns error to the court's denial of her post-trial motion. A court's decision on a CR 60(b) motion will not be disturbed on appeal unless the court exercised its discretion on untenable grounds or for untenable reasons. Knies v. Knies, 96 Wn. App. 243, 248, 979 P.2d 482 (1999).
The party attacking a judgment under CR 60(b)(4) must establish that the conduct complained of prevented the losing party `from fully and fairly presenting its case or defense.' Lindgren v. Lindgren, 58 Wn. App. 588, 596, 794 P.2d 526 (1990), rev. denied, 116 Wn.2d 1009 (1991). Under this standard, an appellate court must necessarily be able to compare what happened at trial with the post-trial allegations. Kimberly's failure to provide a transcript of the trial testimony and cross-examination concerning the tax liabilities significantly undercuts the persuasive value of the post-trial record she has supplied on appeal. It appears to be undisputed that the Yoakums incurred significant tax liabilities as the result of their ownership of a corporation called Avidyne. In 1990, they borrowed $515,000 from Avidyne in exchange for a promissory note, due and payable in the year 2000. In 1994, Avidyne received $750,000 as a litigation settlement. For that year, the Yoakums reported a basis of $750,000 in Avidyne stock and income of $150,000 from a partial cancellation of the debt. The Internal Revenue Service conducted an audit of the Yoakums' 1994 tax return. The audit, completed in early 1998 after Peter and Kimberly had separated, concluded that the Yoakums did not have any basis in the stock and that the income reported as cancellation of a debt was actually a distribution. The net result, according to the IRS, was to increase their capital gains income for 1994 by $898,365. According to the audit, they owed back taxes for that year in the amount of $188,665. With penalties and interest, the total liability was $261,241. The audit did not discuss whether or not there would be any future tax liability on the note.
In March 1998, Peter accepted the results of the audit by signing an Internal Revenue Service consent to assessment and collection agreement.
In June 1998, the IRS advised Kimberly of Peter's action and invited her to enter into a similar agreement. Kimberly declined to do so. Trial occurred in January and February 1999. The court decided to split the Yoakums' net estate evenly. The record on appeal includes a document submitted by Peter at the time of trial, in which he advised the court that he had made some payments to the IRS, but that the Yoakums still owed $140,000 on their 1994 tax liability. Peter also anticipated that the Yoakums would be liable for an estimated $377,235 in taxes on the note when it became due. His estimate assumed a total forgiveness, taxed at the general personal income tax rate. If Kimberly offered any controverting evidence or argument pertaining to the tax liabilities, the record on appeal does not show it. The court apparently accepted the figures offered by Peter, and assigned to him the unpaid tax liabilities for the 1994 return ($140,000) as well as the future tax liability for the note ($337,235), for a total of $477,235. The court offset this liability with a corresponding increase in Peter's share of the marital property. This order was entered in February 1999.
In January 2001, Kimberly filed a post-trial motion to modify the property decree under CR 60(b)(4). She supported her motion with the affidavit of an accountant. The accountant, having reviewed the IRS records of the Yoakum account, deduced that the IRS must have released Peter from the obligation to pay penalties and interest on the original sum of $188,665.
The accountant declared that at the time of trial the IRS had already received $150,000 in payments toward the 1994 deficiency. The accountant accordingly concluded that the unpaid liability from 1994 must have been only $38,665 not $140,000, as claimed by Peter at trial. The accountant further opined that the future tax related to the note would likely be minimal or nonexistent not $377,235, as estimated by Peter at trial because the IRS would most likely look at the note as having been fully distributed, and fully taxed, in 1994. Based on the accountant's analysis, Kimberly contends the trial court was obliged to reopen the property division.
This is not a case like Seals v. Seals, 22 Wn. App. 652, 590 P.2d 1301 (1979), where the husband failed to disclose the existence of community assets in response to the wife's interrogatories. In that case, the trial court reopened the property division upon recognizing a violation of a fiduciary duty. Seals, 22 Wn. App. at 656. This case is more like In re Marriage of Burkey, 36 Wn. App. 487, 490, 675 P.2d 619 (1984), where the court found no duty to disclose values of property owned by the community when both parties were aware of its existence.
Here, Kimberly had access to the same basic information as Peter. All the information analyzed by the accountant after trial could have been analyzed just as well before trial.
Kimberly contends that Peter knew, but concealed, the `fact' that his pre-trial settlement with the IRS eliminated any future tax liability arising from the Avidyne note. But it is not at all clear that the settlement did eliminate the tax liability. The trial court was not obligated to accept the accountant's hypothesis in the absence of direct proof refuting Peter's representations at trial. Kimberly also contends that Peter concealed the fact that his settlement with the IRS included a waiver of penalties and interest on the deficiency. However, the question is whether Peter prevented Kimberly from finding out about the total tax liability. The record on appeal does not show what efforts, if any, Kimberly made at trial to pin down the details of Peter's settlement with the IRS though she knew he had entered into one. As the record reveals, she had the same opportunity as Peter to talk to the IRS about the situation, and did not use it. Under these circumstances we can understand why the trial court did not find Kimberly's arguments for reopening the property division to be compelling. We find no abuse of discretion in the trial court's order denying Kimberly's CR 60(b)(4) motion.
Kimberly argues that the trial court erroneously denied her request for attorney fees under RCW 26.09.140. The trial court has the discretion to award attorney fees upon consideration of the parties' financial resources. RCW 26.09.140. The party challenging an order on a request for attorney fees in a marriage dissolution proceeding must show that the court used its discretion in an untenable or manifestly unreasonable manner. Mattson v. Mattson, 95 Wn. App. 592, 604, 976 P.2d 157 (1999).
An award of fees under RCW 26.09.140 is discretionary and neither party is entitled to attorney fees as a matter of right. In re Marriage of Leslie, 90 Wn. App. 796, 805, 954 P.2d 330 (1998). Here, the trial court determined that both parties could pay for their own fees out of the property distribution. This was a tenable basis for the order, and we find no abuse of discretion. Both parties seek an order awarding attorney fees on appeal. We deny both requests. Peter's motion to modify our previous ruling concerning his financial declaration is denied. Kimberly's motion to strike the reply brief, and for terms, is denied. Affirmed.
I CONCUR: GROSSE, J.