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Peters v. Peters
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:  	1997 ME 134  
Docket:	Cum-96-543
Argued:	May 12, 1997 
Decided:	June 24, 1997




	[¶1]  Carol Peters appeals from a judgment entered in the Superior
Court (Cumberland County, MacNichol, J.) granting her a divorce from
Donald Peters.  Carol contends that the court abused its discretion when it
denied her motion for further findings of fact, distributed the marital
property, awarded alimony, and refused to award Carol her attorney fees,
and that it erred when it found that Donald did not violate the preliminary
injunction imposed pursuant to 19 M.R.S.A. § 692-A(1)(B)(1) (Supp. 1996). 
We affirm the judgment.
	[¶2]  Donald and Carol Peters were married in 1961.  Carol stayed at
home to care for their two children while Donald built a real estate
construction and development business.  In 1968, Donald incorporated his
business as Donalco, Inc., and it thrived.  He acquired several investment
properties in and around Portland, some of which he used for rental units. 
In the mid 1980s, Donald and two other individuals created another
corporation, Ariel Corporation, and started doing development work in the
Augusta area.  Donald also developed partnership interests in two housing
projects known as "North School housing" and "Stratford County housing," 
and created Main Street Arts, which owns a collection of vehicles.  Donald
bought two parcels of land in Eustis and built a house there.  At the time of
the divorce, Donald owned several rental properties in Portland.  Donalco
also owned property, but according to Donald's testimony at the divorce
hearing, the business was suffering due to the economic downturn of the
late 1980s and early 1990s.  At the time of the divorce, Donalco did not have
the credit, equipment, or employees to enable the company to bid on
construction jobs. 
	[¶3]  Donald recently acquired a $225,000 home equity loan from
Fleet Bank and has been using the money to maintain the rental properties
and pay his own living expenses.  His 1994 tax return reflects a net taxable
income of $20,284.
	[¶4]  The parties obtained a divorce in 1979 but remarried nine
months later.  They separated again in 1985 and Carol moved to Florida. 
Donald bought the condominium that Carol was renting and later bought
another condominium on Key Biscayne.  While Carol was living in Florida,
Donald paid all of her expenses.  He sent her $450 per week, and on the last
week of every month sent her a check for $1400.  He also provided her with
a credit card and medical insurance.  Donald stopped sending money to
Carol after she filed for the divorce, asserting that he had run out of money;
the last three or four checks that he sent to her came out of the funds from
his home equity loan.
	[¶5]  Donald made several property transfers after Carol filed for
divorce.  He transferred the Eustis property to their son in October 1994,
ostensibly to avoid the reach of creditors.  The gift tax return stated that the
property's value was $217,000.  Donald testified that he sent a copy of the
conveyance to Carol prior to the transfer and when she did not respond he
completed the transfer.  In June 1995 Donald sold one of the rental
properties on Carleton Street in Portland for $150,000, and another unit on
Harrison Street for $75,000.  According to Donald, Fleet Bank requested
that he sell those properties and apply the proceeds to the mortgages.  At
the time, Donald was trying to get a line of credit from Fleet Bank.  
	[¶6]  At the divorce hearing, Carol presented a personal financial
statement dated June 1995 that Donald submitted to Fleet Bank in his
attempt to obtain financing.  The statement included values for Donald's
assets including real estate, stocks, accounts, notes receivable, life
insurance, and personal property, and also listed his liabilities.  Some of the
values provided in the statement were based on Donald's own estimates
while others were based on prior appraisals.  According to Donald, he
prepared the statement himself without the aid of an accountant because
Fleet Bank told him it needed a statement as a formality and was going to
independently appraise the property.  Donald testified that the statement
"was a very optimistic, hopeful, desperate attempt to keep financing going."
	[¶7]  Donald presented a somewhat different financial picture at the
divorce hearing than that portrayed by the financial statement submitted to
the bank.  According to his testimony, Donalco is not operating and he is
currently using the proceeds of the home equity loan for his living expenses. 
The notes payable from several of his business interests, such as a $900,000
note from Ariel Corporation, are worthless because the businesses are
insolvent and unable to make payments.  He also testified that his
partnership interests in the housing projects are worth nothing.  All of his
personal real estate except the two condominiums in Florida and the
property in Eustis is mortgaged and cross-collateralized to Fleet Bank. 
Donald is personally liable for one-third of Ariel Corporation's debt.  He
submitted tax returns and financial statements indicating that Ariel
Corporation's investments are also not doing well.  All of the income from
the rental units goes to pay the mortgages and he subsidizes their operation
with the proceeds from his home equity loan.  Donald testified at length
about the values on his June 1995 personal financial statement.  He stated
that many of the properties for which he provided different values at the
hearing had been reappraised by Fleet after he submitted the statement.  
	[¶8]  Carol argued at the hearing that the court should make her and
Donald co-owners of all of the marital property, but the court divided the
marital property as follows:  Carol received the unencumbered condo in
Florida in which she lives, and half of the interest in the Eustis property. 
Donald received everything else and all the marital debts.  The court
awarded Carol the Key Biscayne condo, worth about $100,000, as lump sum
alimony, along with $1 per year as periodic alimony.  The court declined to
order Donald to pay Carol's attorney fees amounting to over $40,000.
	[¶9]  Carol contends the trial court's judgment lacks findings
sufficient for effective review because the court failed to make specific
findings regarding marital net worth, the values of certain assets, and the
parties' entitlements to various assets, and that the court abused its
discretion when it denied her motion for further findings of fact and
conclusions of law.
	[¶10]  "The divorce court has a duty to make findings sufficient to
inform the parties of the reasoning underlying its conclusions and to provide
for effective appellate review."  Bayley v. Bayley, 602 A.2d 1152, 1153-54
(Me. 1992) (citation omitted).  "[W]e have consistently stated the need for
the divorce court to assign specific values to marital property, both to 'make
the result more comprehensible for the litigants and . . . [t]o facilitate
appellate review as often as such review may become necessary.'"  Murray v.
Murray, 529 A.2d 1366, 1368 (Me. 1987) (quoting Grishman v. Grishman,
407 A.2d 9, 12 (Me. 1979)).  
	[¶11]  When, as here, a party moves for specific findings of fact and
conclusions of law, "we will not assume the divorce court made the
necessary findings to support its judgment."  Bayley, 602 A.2d at 1154.  If
the court does not make the requested findings, "and the divorce judgment
does not contain adequate findings on the contested issues, intelligent
review is impossible and the denial of a motion for further findings of fact is
an abuse of discretion."  Id.
	[¶12]  The court acted within its discretion by denying Carol's motion
for findings of fact and conclusions of law because the court's judgment
contains adequate findings.  The court's judgment makes findings and
assigns specific values to Donald's business interests, the couple's real estate
and accompanying encumbrances, the couple's personal property, their
debts to attorneys, Donald's personal liability on outstanding debts to
businesses, and the parties' income history and earning capacities.  These
findings are sufficient to inform the parties of the court's reasoning and
allow for our review.{1}  Furthermore, Carol's motion for further findings of
fact did not seek specific findings on any particular issue;{2} given the court's
extensive findings provided in its judgment and Carol's failure to assert that
the judgment was inadequate on any particular issue, the court acted within
its discretion by denying her motion.
	[¶13]  Carol contends that the court failed to value accurately the
marital property.  She asserts that the court should have relied on Donald's
personal financial statement submitted to Fleet Bank in June 1995 rather
than on Donald's testimony during the hearing.
	[¶14]  We review a divorce court's determination of the value of
marital property for clear error.  See Gray v. Gray, 609 A.2d 694, 697 (Me.
1992); Cole v. Cole, 561 A.2d 1018, 1020 (Me. 1989).  "The value
determined must reflect a reasoned evaluation by the court of all of the
evidence."  Cole, 561 A.2d at 1020 (citation omitted).  Here, the court was
not obligated to base its measure of the value of marital property on Donald's
personal financial statement when Donald testified about the value of the
same property at the divorce hearing.  Donald was competent to testify about
the value of his property, see Simmons v. State Highway Comm'n, 234 A.2d
330, 332 (Me. 1967), and "[w]e give due regard to the opportunity of the
trial court to judge the credibility of the witnesses and weigh the evidence." 
Gray, 609 A.2d at 697 (citations omitted).  The values placed on much of the
property in the financial statement were also based on Donald's own
estimates; as the factfinder the court was free to conclude that his estimates
at trial were more accurate measures of value than those in his financial
statement submitted to the bank for the purpose of obtaining a loan. 
See Walters v. Petrolane-Northeast Gas Serv., Inc., 425 A.2d 968, 974 (Me.
1981) (jury was free to accept party's testimony that value of property lost in
fire was between $156,000 and $158,000 even though the party's estimate
of the same loss on a prior tax form was $61,064).  
	[¶15]  Although Carol contends that the court's findings regarding the
value of the equity of the encumbered marital real estate and the value of
some of their business interests are not supported by evidence presented at
the hearing, there is competent evidence to support the court's findings. 
The court's calculation that the equity in the couple's encumbered real
estate is $165,000 is supported by Donald's testimony,{3} as is the court's
finding that the present value of Donalco and Main Street Auto is about
$123,700.{4}  Finally, Donald testified at length about the value of his interest
in Ariel Corporation and its current financial situation.  The record supports
the court's finding that his interest in the corporation has no value, and
since he is liable for a third of the corporate debt, his current interest in the
enterprise is represented by a substantial claim on his other assets.{5}
	[¶16]  Carol contends that the court abused its discretion because it
awarded Donald almost all of the marital property.  She asserts that the
court should have made her and Donald co-owners of the marital property
because there was no reliable valuation data for the property and co-
ownership was the only way to insure an equitable distribution.
	[¶17]  We review the trial court's disposition of marital property for an
abuse of discretion.  Arey v. Arey, 651 A.2d 351, 353 (Me. 1994) (citation
omitted).  "Absent a violation of some positive rule of law, we will overturn
the trial court's decision 'only if it results in a plain and unmistakable
injustice, so apparent that it is instantly visible without argument.'"  Id.
(quoting Williams v. Williams, 645 A.2d 1118, 1123 (Me. 1994)). 
	[¶18]  The divorce court may, in its discretion and when justice
requires, leave the divorced parties as co-owners of property with either
party free to initiate proceedings for partition when the party wishes. 
Zillert v. Zillert, 395 A.2d 1152, 1157 (Me. 1978) (footnote omitted). 
Although the creation of joint tenancies in the marital property may be
appropriate in some circumstances, the divorce court "should endeavor to
divide the marital property in such a manner as to avoid continued financial
interaction between the parties."  Berry v. Berry, 658 A.2d 1097, 1099 (Me.
1995) (citation omitted).  Because "[w]e cannot expect divorced parties to
continue a business relationship that will optimize resources and
profits[,] . . . it is particularly important to avoid creating situations where
the divorced parties remain in joint management of income producing
property."  Id.
	[¶19]  The court acted within its discretion when it refused to make
Carol and Donald co-owners of the marital property.  Contrary to Carol's
contention, Donald's testimony provided competent evidence regarding the
value of the marital property on which the court based its distribution. 
Furthermore, creating joint tenancies would require continued interaction
and business relations creating a potential for continued conflict between
the parties.  Nothing about the court's refusal to make Donald and Carol co-
owners violates a rule of law or creates a plain and unmistakable injustice.
	[¶20]  We also reject Carol's assertion that the court abused its
discretion when it awarded Carol only the Florida condominium and half of
the Eustis property.  In light of the court's findings as to the value of the
assets and the amount of the liabilities, the court's award does not create an
instantly visible injustice and the court acted within its discretion.{6}
	[¶21]  Carol contends the court abused its discretion when it did not
award her greater alimony and that the factors in 19 M.R.S.A. § 721 (Supp.
1996){7} mandate a larger award.
	[¶22]  "A divorce court is vested with broad powers to order one
spouse to pay alimony to the other if the amount is reasonable and takes into
account the paying spouse's ability to pay."  Gray v. Gray, 609 A.2d 694, 698
(Me. 1992) (citation omitted).  "[W]e defer to the discretion of the trial
court unless 'the court has violated some positive rule of law or has reached
a result which is plainly and unmistakenly an injustice that is so apparent as
to be instantly visible without argument.'"  Arey v. Arey, 651 A.2d 351, 354
(Me. 1994) (quoting Bryant v. Bryant, 411 A.2d 391, 395 (Me. 1980)
(quotations omitted)).
	[¶23]  The court acted within its discretion here.  The court
considered the length of Carol and Donald's marriage and Carol's lack of
employment skills and balanced these factors against Donald's current
ability to pay, noting that Donald currently has no source of income, a
negative cash flow from his rental units, and is liable for enormous debts. 
The court also reasoned that, because of the substantial debts on most of the
properties, their liquidation would yield very little and would create high tax
burdens because the tax bases of the properties were so low.  Although
Carol's circumstances indicate that significant alimony would not be
unwarranted, Donald's current financial situation dictates that we affirm the
court's award.  Donald testified that he is currently living on the proceeds of
the home equity loan with no way to make a living other than to obtain small
carpentry jobs, and his 1994 tax return reflects that his net taxable income
for that year was only $20,284.  Finally, the court recognized that Donald's
business interests in Ariel Corporation and Donalco may, in the future, be
very profitable.  The court's award of $1 per year in alimony allows Carol to
seek a modification of the alimony award in the future if Donald's financial
circumstances improve.
	[¶24]  Carol contends that Donald violated the preliminary injunction
imposed by 19 M.R.S.A. § 692-A(1)(B)(1) (Supp. 1996){8} when he transferred
the Eustis property to their son and when he sold the rental units on
Carleton and Harrison Streets.  She argues that his economic misconduct
should have been reflected in the divorce judgment.
	[¶25]  A court's finding that a party to a divorce did or did not engage
in economic misconduct is reviewed for clear error.  See Quin v. Quinn, 641
A.2d 180, 181-82 (Me. 1994).  See also McKinley v. McKinley, 651 A.2d
821, 824 (Me. 1994) (reviewing for clear error the court's finding that a
party failed to comply with a court order).  In Quin we concluded the trial
court was compelled to find that the husband engaged in economic
misconduct when he transferred a condominium to the couple's children on
the eve of a divorce action for the sole purpose of diminishing the marital
estate, and when he took affirmative steps to prevent the wife from learning
about the transfer as she prepared to file for the divorce.  641 A.2d at 181-
82.  We vacated the judgment and remanded the case because the court
failed to take into account such misconduct when determining the proper
amount of alimony to award to the wife pursuant to 19 M.R.S.A. § 721.  Id. at
	[¶26]  Unlike the circumstances present in Quin, the record in the
instant case supports the court's finding that Donald did not transfer the
property for the purpose of diminishing the marital estate.  Donald testified
that he transferred the Eustis property to their son to avoid the reach of
creditors, and Donald and his son recognized that the Eustis property
equitably belonged to Donald and was subject to the court's division.  Donald
testified he sold the rental properties at the request of the bank when he
was trying to obtain refinancing, and did not receive any of the proceeds
from the sales because the money was applied to pay down existing debts on
those properties.  Donald also stated that he attempted to notify Carol about
the transfer of the Eustis property and only completed the transfer when
she did not respond.  Donald's testimony supports the court's findings that
Donald was not attempting to conceal or convert assets to prevent Carol
from receiving her share of the marital property, and the court did not err
in finding that he did not violate the preliminary injunction.
	[¶27]  Carol contends that the court abused its discretion by refusing
to order Donald to pay her attorney fees because she is incapable of paying
them herself.
	[¶28]  19 M.R.S.A. § 721(2) (Supp. 1996) authorizes the court to order
either party to pay the costs and attorney fees to the other party in an action
for divorce.  "In awarding attorney fees, the court is to consider the parties'
relative capacity to absorb the costs of litigation."  Harding v. Murray, 623
A.2d 172, 177 (Me. 1993) (citation omitted).  "We review an award of
attorney fees in a divorce action under an abuse of discretion standard." 
Gray, 609 A.2d at 699.  A court's refusal to award attorney fees to a party is
not an abuse of discretion when the parties are of equal or near equal
financial strength after the divorce.  Lagarde v. Lagarde, 437 A.2d 872, 875-
76 (Me. 1981).  
	[¶29]  The court acted within its discretion when it refused to order
Donald to pay Carol's attorney fees.  Donald's own fees amount to over
$50,000.  Even though Carol is unable to pay her fees, the record supports
the finding that Donald is similarly unable to pay them.  Given the parties'
equal or near equal financial weakness, the court's refusal to award fees was
within its discretion.
	The entry is:
					Judgment affirmed.
Attorneys for plainitff: Peter L. Murray, Esq. (orally) Law Office of Peter L. Murray 75 Pearl Street Portland, ME 04101 Michael D. Traister, Esq. Ann M. Courtney, Esq. Murray, Plumb & Murray P O Box 9785 Portland, ME 04104-5085 Attorneys for defendant: John A. Graustein, Esq. (orally) Deirdre M. Smith, Esq. Drummond, Wood & MacMahon P O Box 9781 Portland, ME 04104
FOOTNOTES******************************** {1}. Carol contends the court's judgment is inadequate because it does not specifically discuss the interests in the North School and Stratford County housing project partnerships. The judgment states, however, that Donald "will retain his business interests in . . . the partnerships . . . ." Furthermore, Donald testified that those interests are currently worth nothing. {2}. Carol's motion requested "findings of fact and conclusions of law relative to the judgment dated June 28, 1996, issued by this Court." {3}. Donald testified that the Baxter Boulevard property was appraised in 1994 at $290,000, and is encumbered by a home equity loan of $215,000. He testified that their various rental properties are valued at about $1,127,000, but are encumbered with mortgages totalling $737,000. In addition, all of the rental property is cross-collateralized to secure a letter of credit from Key Bank for $300,000. Taken together, the value of the real estate exceeds the debt by $165,000. {4}. Donald testified that the value of land in South Portland owned by Donalco is worth between $100,000 and $150,000, and the value of automobiles owned by Donalco and Main Street Auto is between $56,500 and $57,000. Finally, Donald testified that Donalco has debts totaling about $58,000. Thus, the court's finding that the net worth of Donalco and Main Street Auto is about $123,700 is supported by competent evidence in the record. {5}. Carol contends that Ariel Corporation is worth more than the negative value determined by the trial court, but the record does not support her assertion. The corporation's liabilities exceed its assets. In order for the corporation to obtain financing for one of its properties, Donald loaned the corporation $900,000, and the corporation's two other shareholders also loaned the corporation $1 million each. Carol conceded at oral argument that even without considering Ariel's debts to its shareholders, the corporation's debts still exceed its assets. Because of the corporation's financial circumstances, the court determined that the debt owed to Donald as a result of the loan is uncollectible, that his shares are worthless, and his share of the uncovered corporate debt is $639,167. {6}. Although not presented by the trial court in tabular form, the court's valuation and distribution of the couple's property can be summarized as follows: Equity Donald Carol Baxter Blvd. residence $ 75,000 $ 75,000 Condos in Florida $200,000 $100,000* $100,000 Eustis property $217,000 $108,500 $108,500 Donalco & Main St. Auto $123,700 $123,700 Rental properties $ 90,000 $ 90,000 Real estate partnerships 0 0 Ariel Corp. ($639,167) ($639,167) $ 66,533 ($141,967) $208,500 *The court awarded Donald one condo when it distributed the couple's property but then awarded it to Carol in lieu of alimony. {7}. 19 M.R.S.A. § 721 (1) (Supp. 1996) provides: The court shall consider the following factors when determining an award of alimony: A. The length of the marriage; B. The ability of each party to pay; C. The age of each party; D. The employment history and employment potential of each party; E. The income history and income potential of each party; F. The education and training of each party; G. The provisions for retirement and health insurance benefits of each party; H. The tax consequences of the division of