Opinion
Supreme Court No. S-12901.
March 24, 2010.
Appeal from the Superior Court of the State of Alaska, Fourth Judicial District, Fairbanks, Niesje J. Steinkruger, Judge, Superior Court No. 4FA-05-1072 CI.
Lynn E. Levengood, Levengood Gazewood, P.C., Fairbanks, for Appellant. Steve L. Elliott, The Law Office of Steve L. Elliott, Inc., Fairbanks, for Appellee.
Before: Fabe, Chief Justice, Eastaugh, Carpeneti, Winfree, and Christen, Justices. Winfree, Justice, dissenting.
NOTICE
Memorandum decisions of this court do not create legal precedent. See Alaska Appellate Rule 214(d). Accordingly, this memorandum decision may not be cited for any proposition of law or as an example of the proper resolution of any issue.
MEMORANDUM OPINION AND JUDGMENT
Entered pursuant to Appellate Rule 214.
1. The superior court, following a bench trial, found that Richard and Mary McLean had entered into an "implied contract" by which Richard was to provide Mary reasonable lifetime support. The court awarded Mary $3,000 per month in support effective January 2005. Although Richard and Mary had previously been married, that marriage ended in divorce in 1981. Beginning shortly thereafter, they lived together as unmarried cohabitants until 2004. Richard raises numerous theories why the support award was legally and factually erroneous.
2. The superior court's support award turns on the finding "that [Richard] made repeated express oral promises and representations to Mary . . . that he would always take care of her." The court found that he did so both "in private and in the presence of others," and concluded that his promises and representations "created a contractual obligation." The court further found that:
It was the intent of the parties that [Richard] would provide for her financially so that she had an adequate lifestyle. Besides [Richard's] expressed intent that he would always take care of Mary the court finds that it was the implied intent of both Mary and [Richard] that he would take care of her financially throughout her life.
Furthermore, the court found that Richard "intended to make financial provisions for Mary and she relied on his good will to provide for her lifetime financial security."
3. We have reviewed the record and there is ample admissible evidence supporting the superior court's findings. Mary testified that Richard repeatedly promised to take care of her. According to Mary's testimony, "[a]t least once a year" while Richard and Mary lived together as unmarried cohabitants Richard would say that she "would be taken care of." The McLeans' adult daughter Jennie testified on cross-examination that she heard Richard tell Mary repeatedly that he would always take care of her. Mary's cousin Lucy Carlo testified that on several occasions, over "a very long period of time," Richard told Carlo he was "always going to take care of Mary." Carlo testified that Richard made one of those statements between 1991 and 1992, while Carlo was employed at McLean Electric — then owned by Richard before he sold it to their son — when McLean Electric was "slowing down in work and Mary had to get off the payroll." The superior court's post-trial findings found Carlo's testimony to be "very credible." The finding that Richard made repeated express promises to always take care of Mary was therefore not clearly erroneous.
4. The superior court also found that: (1) by the time of the parties' final separation, Mary had suffered a ruptured brain aneurysm that "affected [her] memory, her ability to think clearly and quickly and her ability to respond verbally"; (2) Richard was a "highly sophisticated buyer and seller of small properties and businesses"; (3) Mary "did not receive any monetary payment" for her work at McLean Electric "[m]ost years," even though she "worked regular weekdays and longer days and weekends when it was busy"; (4) Mary continued to do weekend janitorial and cleaning work at McLean Electric even after 1998, when she began working elsewhere; and (5) Mary had understood for some time that Richard provided for her in his will; she did not realize that he had not made any such provision until she found a copy of the will sometime between 2001 and 2003, after she suffered the aneurysm.
5. According to Carlo's testimony, Richard made at least one of his promises sometime in 1991 or 1992, more than a decade before Richard and Mary finally separated. Mary's testimony suggests the promises began as soon as the couple began living together as unmarried cohabitants. Carlo's testimony also implies that Richard's promises were made in exchange for, at the very least, Mary's continued employment without compensation at McLean Electric. Carlo testified that Mary worked at McLean Electric, sometimes without pay, and that Mary was the "first person" to forgo compensation during "slow times." Furthermore, the evidence permitted an inference that Richard's promises were in exchange for Mary not leaving Richard; Richard testified that Mary told him "she was leaving" approximately "[o]nce a month," and the McLeans' daughter testified that Mary expressed a desire to leave on more than one occasion. Mary's consideration for Richard's promises was her long-term performance in continuing to work at the business and, possibly, continuing to live with Richard. The court found that there were "express promises . . . of financial security" and that "there were significant, under-compensated contributions made by Mary to McLean Electric, the family business." It also found that "there was a significant undertaking of joint liability by the execution of a guarantee when [Richard] got Mary to sign for a line of credit for their son." The superior court therefore did not err in finding a contract for reasonable lifetime support based on Richard's express promises. "Absent a showing of a cognizable contract defense, such as fraud, we hold parties to their voluntary bargains." Many courts have considered claims for support following the end of a long-term unmarried relationship. Such claims potentially raise intriguing and difficult issues. But all such issues are immaterial in this case given the trial court's findings of fact, the ample evidence of Richard's promises, and Mary's long-term performance in remaining in their domestic relationship, continuing to work — sometimes without compensation — at McLean Electric, and contributing to the family welfare.
See Dewey v. Dewey, 886 P.2d 623, 625-26 (Alaska 1994) (holding that party's express agreement to provide continuing support for former stepchild created enforceable contractual obligation even after divorce, regardless of fact that Alaska law does not typically impose duty to support stepchildren).
Id.
See, e.g., Marvin v. Marvin, 557 P.2d 106 (Cal. 1976).
6. Most of Richard's arguments about the legitimacy of an award to Mary are mooted by our conclusion. Richard and Mary's contract for support renders Richard's following property-division arguments either irrelevant or without merit in the context of this case: (1) Alaska law "limits" awards to non-marital cohabitants to "property accumulated during the non-marital cohabitation"; (2) it was error to deny Richard's motion to dismiss because Alaska law "restricts the division of property of non-married cohabitants to joint property," and Mary and Richard had no joint property in part because of their prior property settlement agreement; and (3) it was error to interpret Tolan v. Kimball as supporting the proposition that property acquired after non-marital cohabitation can be divided. The contractual basis for the support award also renders irrelevant Richard's arguments that: (1) in awarding Mary future support, the superior court must have relied on a doctrine, either "palimony" or common law marriage, that is contrary to Alaska law; (2) the superior court erred by considering equitable principles, thus treating the case "as a divorce case"; and (3) the superior court erred by citing Callahan v. Dye, an unpublished opinion "utilizing California law." Richard also advances arguments about immaterial factual errors, such as the number of years the parties cohabited and the date when Richard sold McLean Electric to their son. Moreover, the briefing in this case does not convince us that the policy against common-law marriages in Alaska prevents unmarried couples from entering into enforceable financial contracts, especially when the parties' business interests are in part being served. We therefore AFFIRM the superior court's determination that Richard was obligated to provide financial support to Mary.
Tolan v. Kimball, 33 P.3d 1152 (Alaska 2001).
Callahan v. Dye, Mem. Op. J. No. 11440, 2006 WL 1667668 (Alaska, June 14, 2006).
7. The superior court found that the parties had agreed that Mary would be supported to a "reasonable" extent, but the $3,000 monthly support award did not refer to evidence of the value of either Richard's past support of Mary or Mary's present and foreseeable needs. Instead, the court adopted Mary's suggested figure. Absent compelling evidence that would make the basis for the award self-explanatory, such as evidence of the value of Richard's pre-separation support and of Mary's needs, it is not apparent how the award was calculated.
8. The superior court also estimated that Richard's annual income was $163,000. Richard's 2006 tax returns — which were added to the record after the trial court outlined its findings of fact and conclusions of law, but before it issued its decision and order — show Richard's income to be approximately $100,000 less than the court's estimate. The court's findings identified several potential sources of additional income or earning capacity, but the court did not explain how any of Richard's possible assets could be treated as sources of income. While the evidence might have supported an inference that Richard had significant assets that could produce income beyond his pension and social security, there was no evidence that his annual recurring income approximated $163,000 or that any income could be imputed to him that would account for that total. The evidence instead established that Richard's only reported, consistent stream of income was approximately $63,000 before taxes. It was therefore an abuse of discretion to rely on a figure more than twice as large as Richard's annual income in calculating Mary's support award.
9. We consequently VACATE the determination that Richard owed Mary $3,000 per month and REMAND for further proceedings regarding Mary's needs, Richard's income and earning capacity, and the financial extent of the intended undertaking.
I disagree with the court's conclusion that there is sufficient evidence in the record to support an award of damages for breach of an express contract for Richard's lifetime financial support of Mary, even assuming such a contract exists and might be valid and enforceable. The court focuses on express promises Richard made, but conspicuous by its absence is a discussion of any express promises Mary made. Despite implicitly rejecting the trial court's reliance on an implied contract theory, the court itself relies on implications of promises Mary might have made to support an express contract, thus allowing the court to avoid difficult questions about Mary's performance under the express contract. Could Mary walk out on Richard at any time and still be entitled to his financial support for her lifetime? Did Mary breach a promise of performance, or perhaps the implied covenant of good faith and fair dealing, by assaulting Richard and lethally threatening him so that he had to obtain a domestic violence order requiring her not to contact him or be within 1,000 feet of his residence? If so, did Mary's breach of the express contract excuse Richard from continuing to provide Mary financial support after she left his residence? Given the court's reliance on an express contract theory in this case, the court should remand for findings on the specific nature of the express contract, including Mary's express promises and whether she breached the contract, in addition to the damages issues left for resolution on remand.
The vagaries of the purported contract suggest that it might be a contract for common law marriage or marriage-like intimacies, which would carry with it certain public policy concerns. Caution dictates keeping this in mind for future disputes of a similar nature.