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Barrett v. Barrett

April 23, 2010

GREGORY PAUL BARRETT, PLAINTIFF-APPELLANT,
v.
ANN MARIE BARRETT, DEFENDANT-RESPONDENT



Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Hon. Jon J. Shindurling, District Judge. Hon. Earl Blower, Magistrate Judge.

The opinion of the court was delivered by: Horton, Justice

2010 Opinion No. 43

The decision of the district court is affirmed.

This is an appeal from the district court's decision on appeal from the magistrate court. In this appeal, we are asked to determine the character of property located in Etna, Wyoming (the Etna property) and disputed in the divorce proceedings between Gregory Barrett (Greg) and Ann Marie Barrett (Ann). The Etna property was originally Ann's separate property. During the marriage, in connection with refinancing the Etna property, Ann executed a quitclaim deed to Ann and Greg as tenants by the entirety. The magistrate judge found that the language of the quitclaim deed was clear, that Ann's testimony regarding her intent in signing the deed was therefore inadmissible and concluded that the Etna property was transmuted to community property. On appeal, the district court held that trial judges have leeway to consider additional evidence in the context of refinancing and remanded for the magistrate judge to determine whether Greg met his burden in showing that transmutation had occurred. Greg timely appealed. We a ffirm the decision of the district court.

I. FACTUAL AND PROCEDURAL BACKGROUND

Prior to her marriage to Greg, Ann was married to Kevin Spencer. They divorced in 1996 and, as part of the divorce settlement, Ann was awarded the Etna Property now in dispute. In 1997, Ann and Greg were married in Idaho Falls. At the time of the marriage, Ann owed $123,961 on a debt secured by the Etna property and, until 1999, made monthly payments toward the debt from her separate checking account. In 1999, Ann sold approximately 2.5 acres of the property to pay off the debt on the Etna property. As the magistrate judge explained, [t]o close on that sale, Ann had to pay off the existing mortgage debt . . . . To pay that debt, she and Gregory borrowed $34,512 from the Bank of Star Valley (BSV), giving a promissory note that they both signed. Ann also signed a quitclaim deed conveying the remaining Etna acreage to "Ann Barrett and Gregory Barrett, Wife and Husband as Tenants by the Entireties," and then she and Gregory signed a new mortgage in favor of BSV, pledging the property to secure repayment of the $34,512 loan.

The quitclaim deed was one of a number of documents related to the sale and refinancing. At trial, Ann testified that she would not have signed the quitclaim deed had she understood that she was giving Gregory a one-half interest in the property. From the time of the refinancing until 2003, Ann made payments on the BSV debt from a separate checking account. In 2003, Ann and Greg opened a joint checking account and Ann made payments on the debt from that checking account. At the time of the divorce trial, the debt was reduced to $22,881.

On August 29, 2005, Greg filed for divorce and, on September 14, 2005, Ann filed a counterclaim for divorce. Originally, Ann requested an unequal distribution of the community property; she later abandoned this request. Later in 2005, Ann sold two additional acres of the Etna property, the proceeds of which were placed in her attorney's trust account. The divorce trial, involving questions of the grounds for divorce, custody and child support, division of property and debt, and Ann's request for attorney fees, took place from June 18-22, 2007. On July 3, 2007, the magistrate judge entered a decree of divorce, effective nunc pro tunc June 22, 2007. On August 30, 2007, the trial court decided the issues relating to the grounds for the divorce and child custody and support. On September 11, 2007, the magistrate judge entered Findings of Fact and Conclusions of Law on Property and Debt Division and Attorneys Fees. The appeal before this Court presents only the question of the character of the Etna property.

The magistrate judge found the quitclaim deed to be clear and unambiguous. Accordingly, although there was testimony during the trial regarding the execution of the quitclaim deed, the trial judge did not consider Ann's testimony, finding it to be inadmissible parol evidence. Rather, the trial court ruled that Ann's execution of the quitclaim deed transmuted the Etna property into community property.

Ann appealed to the district court. The district court ruled that "courts are granted much broader leeway in considering parol evidence in situations where an otherwise unambiguous document is part of a refinancing situation . . . . In such situations, the intentions of the parties are rarely clear simply from reading a document prepared by a third party." The district court found that the magistrate judge should have considered parol evidence and remanded the case for further proceedings.*fn1 Greg timely appealed.

II. STANDARD OF REVIEW

On an appeal from a case in which the district court acts in an appellate capacity with regard to a decision of the magistrate judge, this Court reviews the record of the magistrate, affirming or reversing the decision of the district court. Johnson v. Johnson, 147 Idaho 912, 915-16, 216 P.3d 1284, 1287-88 (2009). This Court exercises free review over conclusions of law. Bliss v. Bliss, 127 Idaho 170, 172, 898 P.2d 1081, 1083 (1995). Division of property is a factual question, left to the sound discretion of the trial judge. Id. "Appellate courts . . . are not permitted to substitute their own view of the evidence for that of the trial court, or to make credibility determinations." Nelson v. Nelson, 144 Idaho 710, 713, 170 P.3d 375, 378 (2007) (citing McGriff v. McGriff, 140 Idaho 642, 645, 99 P.3d 111, 114 (2004)). The relevant inquiry in determining an abuse of discretion "is whether the trial court (1) correctly perceived the issue as one of discretion; (2) acted within the outer boundaries of its discretion and consistently with the legal standards applicable to the choices before it; and (3) reached its decision by an exercise of reason." Hopper v. Hopper, 144 Idaho 624, 626, 167 P.3d 761, 763 (2007).

III. ANALYSIS

In deciding this appeal, we consider only Idaho law, as neither party has argued that Wyoming law should apply in determining the ...


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