- [Bailiff] The Honorable Justices at the Supreme Court
of the State of Alaska.
- [Chief Justice Carney] Good morning.
You may be seated.
- The Supreme Court is now in session.
- Good morning.
We are here on the record in the case of
Kerri Stoltenberg versus Matthew Rehak.
Ms. Luce, I understand that you'll be arguing
on behalf of Ms. Stoltenberg
and Ms. Vickers
on behalf of Mr. Rehak.
Ms. Stoltenberg.
Ms. Luce, I'm sorry,
- [Ms. Luce] Good morning.
My name is Melissa Luce,
and I am representing Kerri Stoltenberg in this matter.
And for simplicity, I will use the party's names
throughout, first names.
May it please the court.
This is not a case of mere dissatisfaction with
the outcome of a divorced property settlement.
This is a case where the
record does not support the outcome.
The record shows that there are a number
of mistakes in the property division,
and many of the adverse findings the court made
about Kerri are unsupported by the record,
and several are actually contradicted by the record.
This case has been very comprehensively briefed,
so I would like to jump right in and discuss the
mischaracterization and undervaluation
of the loan from Kerri's father, Ed Stoltenberg,
for the marital residence.
This debt was valued at zero in the findings,
and the record does not support the zero valuation
of the debt to Mr. Stoltenberg.
The trial court failed to consider the overwhelming
amount of evidence that corroborated this loan.
And based on the documentary evidence,
zero valuation of the loan was clearly erroneous.
- [Justice Henderson] Ms. Luce, would you agree
at least that the evidence
regarding both the amount of the debt
and whether it would be collected on was mixed?
Would you agree that there was evidence
from both parties' perspectives testimony?
- That it was mixed?
- That it was mixed evidence.
- Well, if I recall correctly,
Mr. Stoltenberg did testify that he intended to expect
whoever was awarded the marital residence
to honor the debt and continue to stay.
- And the court specifically found that he was not
credible, saying he would expect his daughter
to repay him.
True?
- I believe that is correct.
Yes.
- And there was testimony about, I believe,
Ms. Stoltenberg receiving $2,000
either before or after she
was making $2,000 payments,
sort of evidencing a pattern that there would not be an
expectation that she repay if she received the debt.
- Right. I believe that Mr. Rehak had testified that
he saw things like that in Kerri's bank statements,
but there was never any documentary evidence presented
that showed a transaction of Kerri paying her parents
and then her parents depositing $2,000, for example.
- Was there an objection to hearsay?
- Was there an objection to hearsay?
I don't recall that.
- In other words, wouldn't it be fair for the court
to rely on testimony rather
than underlying documentary evidence?
The court can do that.
- That's fair.
- Was there any contradictory evidence
that that didn't happen?
- Well, if I recall from trial, I am not sure.
I know that Kerri did
make several payments post-separation.
And then I believe she testified
that finances just got too tight.
She wasn't able to continue making the payments.
But it was always her intention that she would continue
making the payments and honor her father's debt if she
was awarded the house.
Any more questions?
Next, in addition to the receipts,
there is also the record documents that there was 10
years of payment history of $2,000 per month payments
that started in July of 2011.
And these were made by both parties and included
the words house payment in the memo line.
And that's at record 7764 to 7884.
So these payments, overall, totaled $208,000.
And under this logic,
there should be at least $86,777 remaining on the loan.
That's assuming no interest is applied to that.
- The court found a really broad range of how
much the loan was actually worth, right?
- It did, because there was some controversy about
whether or not Mr. Rehak and Mr. Stoltenberg had agreed
that he would be credited $90,000 plus dollars
for some work that he did on Mr. Stoltenberg's home.
So Mr. Rehak tried to support this assertion by
creating a fake invoice
for his company, Nodak Electric.
And I believe the court overlooked the fact that that
invoice was created in 2021 after the case had opened.
And it was an invoice of work that he allegedly
performed six years before the company had even been
established as a business.
- But the court nonetheless found almost a $100,000
variation between the low possible worth of any loan
and the highest possible worth of it, correct?
- If I recall correctly,
I believe it was because they were
considering that $90,000.
Ninety-two, $95,000.
- But the finding remains an enormous range
that any loan could have been worth.
- Right, I understand that.
But the receipts that were presented,
do corroborate that entire $294,777.
- Weren't the receipts submitted,
at least some of them,
somewhat nonspecific
in that there was construction
of two homes going on, really, at various points.
There was the Rehak home and the Stoltenberg home.
And so I think that I recall that there was some
difficulty with the idea that they weren't necessarily
all tied directly to the Rehak home.
- Right, and I do recall that that was addressed
with testimony, and I believe all the parties
testified that, to some extent,
the houses were in very different
stages of construction.
So, for example, an invoice for windows in 2005 would
not have been for Mr. Stoltenberg's house,
who was just laying the foundation, for example.
You know, and something,
a charge for foundation equipment or materials in 2005
would be for Stoltenberg House, not Rehak House.
So, in that regard, it seemed like it was pretty easy
to discriminate which receipt went to which house.
- [Justice Oravec] Wasn't there one
that just said $10,000 house?
Like, a check that says...
I mean, that could be either house.
- So that was, if I recall correctly,
that was a $10,000.
So the parties had put on
their Alaska Airlines card building materials.
And then father would give them a lump sum to pay off
that card as his way of supporting them,
getting their cards paid off.
- But it doesn't tie to any receipts.
It's just a credit card reimbursement,
not tied to any particular cost.
- I seem to recall, and I'm sorry I can't point where
in the record, but there was an Alaska Airlines
statement provided for one of the parties
that had an itemization and showed that
$10,000 payment being made
within that same timeframe.
And I wish I could cite to the record,
but I can't right now.
Let's see.
Just going back to that fake Nodak invoice,
Mr. Rehak did testify that that was a mistake on his
part to make that invoice.
And...
- But whether he wrote it up on an invoice is neither
here nor there with regard to his testimony of all
the electrical work.
I mean, wiring a whole 5,200-square-foot house.
Although with help from Mr. Stoltenberg,
that's a significant amount of work and value.
- It is.
And, you know, the opposition brief did say the parties
agreed that the supplies and work Matt provided would
be credited against the amount loaned to them,
but there's no evidence in the record except for Matt's
testimony of this agreement.
- Well, that's the same as about the house.
I mean, right, it's testimonial.
- Sure.
- So that's before the court, and the court can decide,
you know, kind of what they find to be most likely.
- Right.
It just seems unlikely that Matt himself would be
purchasing supplies for Mr. Stoltenberg when he himself
was accepting money from
Mr. Stoltenberg for his own home.
So...
- Well, not if you...
I don't need to argue.
I don't necessarily think that's the case, but, I mean,
it's certainly within the range of what the trial court
could decide that it might make sense for the
electrician to go to the store and buy what the
electrician thinks the electrician
will need to wire a house.
- Yes, that is...
But both Kerri and Mr. Stoltenberg
testified that that wasn't the agreement,
and Mr. Stoltenberg also testified that Matthew
did not do the main wiring in his house, that
another individual did.
- But that's entirely the trial court's province to
weigh testimony and decide which is more convincing
and more credible.
- Yes.
- Not for us to re-weigh.
- Sure.
So, next, the trial court also abuses discretion by
improperly considering whether Mr. Stoltenberg would
actually attempt to collect this debt.
- Why is that an abuse of discretion when it's very
much tied to the existence and value of a debt?
Whether one actually expects another to pay back
a debt or whether they're going to forgive it,
and it's essentially a gift.
That seems very relevant to whether there was actually
a debt that the court needed to consider.
- But on the same token,
it wouldn't negate the existence of the debt.
The parties still received the building materials.
They still built the house.
The house was valued at over a million dollars,
for under $300,000 worth of building materials.
They definitely got the value.
And, I mean, the marital estate is altered
by not having that debt included in it.
So, are there any more questions
about the debt to Mr. Stoltenberg?
- I don't see any.
Feel free to go on.
- All right. Next, I'd like to address
the home equity line of credit, the HELOC allocation.
Here, the HELOC followed the house,
but the boat and motors purchase with the
HELOC followed Matthew.
- That's not exactly a novel idea that the home equity
loan goes with the home, right?
- Right.
Oh, absolutely.
But, you know, you could also argue that the loan
collateral determines the lender's remedy.
It doesn't necessarily determine the equitable
allocation between the spouses.
- But a home equity loan has the home for collateral.
- Right, exactly.
- [Justice Borghesan] And doesn't it make it easier if
you send the home equity line of credit with the home,
you know, that allows the person to easily
refinance and adjust if necessary.
Whereas if you send it the other way
to the spouse that doesn't have the home,
then it becomes much more complicated
to change or deal with that debt.
- Sure.
But the court had remedied that by ordering
that it be paid off or put into Kerri's name.
And so that would have negated any sort of...
and if it had been awarded to Matthew,
it was already in his name.
So the court could have ordered
that he paid it off or switched collateral.
- Why does it matter if you're just
strewing it up at the end?
- I'm sorry, what?
- Why does it matter?
Because, at the end, it's like you get this,
you get that, we divide it equally,
and someone owes someone
an equalization payment.
Why does it matter who gets this loan?
Wouldn't it be better to let it go with the house so
the person doesn't kind of hope someone else makes the
payment on where they're living?
- Sure.
You know, that is true, but if that were to happen,
Kerri could have had the option to pursue a remedy
by repossessing the boat, for example.
- Or she could take the equalization
payment to pay off the HELOC.
- Right, that too, yeah.
But I think her point was that she shouldn't have to be
responsible for a debt that purchased the boat.
- Didn't she testify?
I mean, with some prompting by counsel on
cross-examination, but didn't she essentially say,
"Yeah, I understand that the HELOC
would go with the home?"
- Well, I do recall reading that section of testimony,
and she was a little indecisive.
She was like, "Well, yeah,
I guess I don't know how that really works," but I
think so, I think was her kind of roundabout statement
about the HELOC, not expressing concrete, like, yes,
I'm getting this debt
or anything to that effect.
- But the starting point for the court is that a debt
that was taken on during the marriage is a
marital debt, correct?
- And what?
- It's a marital debt.
- Yes, it's a marital debt.
So, it's up for grabs, basically.
And then it becomes a matter of the court
exercising what we regularly call, its very
broad discretion, right?
- Sure.
- And so I'm kind of stuck on Justice Oravec's
question, like, why does it matter if that gets
put on her side, but he has to pay an
equalization payment that's bigger than it?
- Well, I think this coupled with the post-separation
payment credit, the Ramsey credit,
is what really makes this inequitable.
Because the loan had been characterized as a boat loan.
An early order also characterizes it as a boat loan,
which solidified the party's intent for this loan.
And Matthew had sole exclusive possession
of the boat, and that was noted in the findings.
But yet he got the credit for making this payment on
this boat that he had sole possession of.
And that is really, I think,
what makes this the most inequitable is that, you know,
that was to Kerri's detriment,
that he got this $31,000 credit for making payments
on a boat that only he had access to.
And this is a valuable boat.
We're not talking like a little riverboat.
This is now valued at $70,000 almost 20 years later.
So, it's substantial.
- We're taking you into your rebuttal time.
So, if you want to save it, it's totally up to you,
or you can keep going.
- I would like to...
Just make sure.
I would like to...
- ...keep your remaining four minutes?
- Yes.
Thank you.
- Thank you.
Ms. Vickers.
- Oh, sorry.
- [Ms. Vickers] No problem.
But I will do the same.
This, I can't spill all over my paper.
May it please the court.
I am Randi Vickers, and myself and Linda Limón
represent Matthew Rehak.
He is the appellee and
the cross-appellant in this matter.
Alaska case law, I'm going to
start with our cross appeal.
Alaska case law clearly requires that if a trial court
awards a division other than a 50-50 split,
then it needs to make specific findings
of fact that support that conclusion.
It has to show its work.
- This trial court, despite having found that
Kerri Rehak committed marital waste both during the
marriage and during separation,
and despite stating that it would account for the waste
in the property division,
failed to make appropriate findings that would give you
the ability to review what happened.
The result was an ad hoc adjustment to the property
division, an adjustment that failed to specify the
amount of the adjustment to
the overall property division.
To end with a 50-50 division,
which is the standard in Alaska,
the court had to start with a different division.
It had to believe that something else was warranted,
yet no findings were made to support such a division.
This court requires trial courts to show their work
when they deviate from a 50-50 division.
And it should likewise require trial courts to show
their work when they are adjusting a final
property division to account for some amount of waste.
- [Justice Pate] Counsel?
- Yes.
- This question backs up just a little bit on your
analysis, and it has to do with whether or not the
trial court actually made a dissipation finding or not.
I'm looking at excerpt 151,
and the trial court states that Kerri committed
hundreds of thousands of dollars in marital waste.
Okay, that seems to say, well,
that she must have found,
the trial court must have found dissipation.
But the trial court then goes on to say,
"Because Kerri's conduct occurred more than five years
prior to the party's separation,
it's not appropriate to recapture the loss," which kind
of takes me back to findings that are necessary for
dissipation, which one of them is that the loss
occurred during or after the marital breakdown.
So the implication being maybe the
judge found there wasn't dissipation.
I mean, it seems like a mis...
- Because it failed to date one of the states...
- It's a confused ruling,
but what do you think of that?
- Well, I would say that there is evidence
on the record from Kerri herself that the marriage
was a bad marriage for seven years prior to
the actual serving of divorce pages,
which means that during this time
that the investments were being made
for the day trading,
during this time that she was taking money
out of Nodak's operating account and using it to day
trade, the marriage was breaking down,
albeit a slope down.
- But did the Superior Court make those findings?
It does seem like, and I've reviewed certainly
the references to Jones and following precedent,
and I think the Jones ruling is more nuanced
than perhaps the briefing is reflecting.
But it does feel like the Superior Court sort of
treated a lot of this conduct and made findings
regarding the conduct by Kerri,
but then didn't necessarily go into the factors
discussed in Jones and subsequent precedent to
determine whether this was truly dissipation or waste
that calls for recapture.
And that, it's hard to know what to do with that,
the use of the term waste or dissipation without
sort of the analysis of those factors.
- I would agree that it's a difficult decision
to nail down and to figure out.
It's kind of squirmy.
Where is it going with this?
But there was a conclusion where the court said,
"I am going to take account of this in the
final property division."
And it wouldn't do that.
It wouldn't be authorized to do
that absent a finding of waste.
- Couldn't it do that just as a part of weighing the
Merrill factors or whatever the factor,
just in dividing the estate,
couldn't that be an other factor as concerned?
- Oh, interesting.
I hadn't thought about that.
Yes, I guess it could be another factor.
- And that would explain the ad hoc.
I'm not saying that this ruling is very clear.
You kind of had to parse to get there,
but is that a possibility of what happened?
- That is definitely a possibility in
regards to the day trading.
But the day trading is the only conduct that occurred
during the marriage and that there's a question
about whether or not there was a breakdown
in the marriage at that time.
During separation, the obstruction occurs
and the loss of Matt's personal property occurs.
There's no question.
- Which personal property,
was that the baseball cards?
- Yeah, that's the baseball cards.
- Didn't the court find that ultimately that Kerri
wasn't responsible for the loss of those?
- Yeah, the court did say that
Kerri failed to safeguard Matt's possessions.
- True.
- But could not...you know,
there was no testimony because, you know,
how could there be testimony saying,
you know, Kerri did X to the cards.
Kerri physically took the cards because it was passive.
Kerri failed to safeguard the cards that were in the
home that she had sole possession of,
and that Matt was not permitted to come into.
- Well, in order for it to be something that would be
recaptured, there'd have to be this intent to deprive
Mr. Rehak of sort of this property.
And it seemed like the court,
and I'm not laying my hands on the exact finding,
but it seemed like
it was not finding that intent.
- That it didn't find a deliberate
intent to keep the baseball cards.
Well, there was definitely...
I believe that intent can
be inferred from your actions.
And if you have something in your custody and you don't
take care of it, and bad things happen to that thing
out of negligence, there is something that can be
inferred there in terms of your intents
towards the objects.
- It seems like that happens to a lot
of people in a lot of circumstances.
I don't know that I would want someone
to infer that about my own actions.
- The same objection also does not apply, though,
to the obstruction of the operation of Nodak Electric
and Alaska Solar.
- On that part, the failure to cooperate,
and there were extensive findings there,
how is the court to value that?
Like, if there was this remedy of recapture,
assuming that there was,
this amounted to dissipation or waste,
what was the court to order?
What was the evidence regarding
what should be recaptured?
- I think that that presents a very difficult question
for the trial court because you're right,
it is difficult to value how much obstruction
is costing the company.
But it is clear that obstruction was harming the
company, and it was harming their ability
to get insurance.
It was badmouthing them to clients, and to suppliers,
and to the IRS, and to anyone else who would listen.
It was harming the company.
And it is hard to quantify that.
But at the same time...
- Clarification kind of an element, though,
of the recapture analysis.
It's like you have to show first that there was an
amount of value, and then you have to show a
loss in value.
And then you have to show
the other things about intent.
- I think that would be a
requirement to recapture that specific loss.
Yes, you would have to figure out a way to value it.
But I'm not sure that it would prevent the court from
considering it as an other consideration with the
Merrill factors and adjusting
the property division accordingly.
- But that's a different analysis, right,
than recapture [crosstalk].
- Yes, it is a different analysis than recapture.
To be clear, I only think that the court erred
in not recapturing the things that we have
specific values for.
The court did make a finding that it delayed the tax
returns and cost thousands of dollars, but again,
that's not specific enough
to put on a 90.1 table.
I think the second issue I'd like to turn to is,
I put on my hat as the appellee and start
with the loan question.
During the divorce, for the first time,
Kerri produced documentation of the house loan,
including an amortization table with 6% interest that
capitalized during the time that the parties did
not make payments.
And suddenly, a debt that Matt
thought was $200,000 became $600,000.
And as he admitted in his testimony,
he made a mistake at that time and, in anger,
filled out from Nodak Electric an invoice charging
Mr. Stoltenberg for the work that he had done on the
house and for the supplies that he had provided
to Mr. Stoltenberg for his house.
That was a mistake, but that
does not change the underlying testimony,
which was that both households were helping each other
as they were going through this process
of building the house.
It wasn't as straightforward as
a loan, interest, that's it.
The agreement was more we're going to help each other,
and then you're going to pay back some of the amount
that we forward out to spend on you.
The agreement was different.
That's what the evidence shows,
and that's what the trial court found.
The trial court found that it's really unclear how much
the original loan was for because both households were
helping each other out.
But again, this doesn't change the fact that this
helped the Stoltenbergs and that it was intended
to offset part of the loan.
The second issue I'd like to touch on is the HELOC.
And the theme here is money is fungible.
Matt was ordered to pay $52,000 as an equalization
payment, and he did that.
That was the court order.
That's what he did.
It shouldn't matter that Kerri took the loan on her
side of the table when she received $52,000, which was,
I believe, $16,000 more than the actual loan.
She could have cleared the loan if it was important to
her to not have to make payments on the loan.
But as to the issue of the Ramsey credit,
it is true that some of the money from the HELOC was
used to buy the boat.
And there's also testimony on the record that some of
the money for the HELOC was used, as you would expect,
to finish up the house, to finalize the house.
And that both of these things mean that a Ramsey credit
was appropriate because Matt was excluded
from the house.
And during that time, he was paying rent.
He was having to provide a house for himself
and a house for the boys when he had them.
So, he incurred an expense.
And at the same time,
Kerri is living in a home that doesn't have as many
expenses because there's small payments being made
to her father, some of which are being returned,
and half of which Matt is making.
And also, there is a HELOC loan,
and then other than utilities,
those are the accounts that are being made.
So, it was appropriate for the court
to treat it as almost a rent credit.
It was $864 a month.
That seemed like a reasonable amount
to credit back to Matt.
- If there was not testimony,
I'm not saying that there wasn't.
I'm just kind of pushing the limits
of the argument that you're making.
If there was not testimony supporting that
the HELOC was partially to finish up the home,
if it was entirely for the boat,
would that impact your argument with regard
to the Ramsey credit?
- No, I don't think so because when it comes down
to it, the creditor is going to come after the home.
It's a loan secured by the home,
which means whoever has the home needs to take care
of that loan.
I don't think it changes the analysis.
The next issue I wanted to talk about
was the cumulative error issue.
I think it would not work well in Alaska case law
in the divorce context to adopt a concept
of cumulative error.
- It's a criminal concept, isn't it?
- It is a criminal concept,
and it presumes a jury trial, for the most part.
In this case, we have a bench trial,
and if you have to, and you can send back a discrete
issue to the bench for a retrial
or for a re-ruling on that discrete issue.
You do not have to do a
complete do-over of an entire trial.
And in this case,
it was a 12-day trial.
It was a very long trial.
You certainly don't want to spend
judicial resources redoing that trial.
Cumulative error in the criminal context is described
as a concept of cumulative prejudice.
You have to demonstrate that the errors combined
together were so distorting that they changed whether
or not the trial was fair
to the criminal defendant.
It just doesn't apply to a divorce context
where neither party is a criminal defendant.
And they do not have the protections of a criminal
defendant, and they're appearing before a judge,
not a jury trial.
I see that I'm not getting a lot of pushback on that.
The final issue that I wanted to go to
was the F-15 truck, or F-150 truck, issue.
This was, it's actually appellee's issue,
and I should have gone to it third instead of now.
And the accounting of the
shareholders' loan for $83,040.
And I've combed extensively through the record
on trying to piece down exactly what was going
on with the shareholder loan.
And I know that in the record,
there is no piece of paper that provides a line-by-line
of exactly what is in
the shareholder loan.
What there is in the record, though,
is there is testimony from the bookkeeper, Sheila,
and from the accountant, Kathy Northcutts,
explaining the process they went through to decide
to put together
the shareholder loan.
And what they did is they looked at the receipts,
and they asked the first question,
is this a legitimate business expense
of Nodak Electric or Alaska Solar?
And if it is, then it's a business expense,
and we'll treat it accordingly.
But if it's not, if it's a personal expense that was
paid by the company, then it has to be accounted for.
And the way that it is accounted for is as a
distribution first to the shareholder who it was
reimbursing or was paying for,
and then secondly as a shareholder loan.
Nodak Electric is an S corporation, and Kerri owns,
or at the time owned 25% of the shares,
and Matt owns 75% of the shares.
So, there was an accounting problem in that any
distribution had to match those share totals.
So if, for example, the company were to distribute
$100, $75 had to go to Matt, $25 had to go to Kerri.
But if during the accounting, the distribution,
it was figured out that Kerri had received more value
than that 25%, then it was coded as a shareholder loan.
And that money did need to
be paid back to the corporation.
Now, the reason this matters is that in the valuation
of the company, the $83,040 is placed as a receivable
of the company,
as an asset of the company.
Which means that the company that Matt took on his side
of the valuation is expecting to receive that money.
Now, we know that the company
is probably not going to receive that money.
That was treated as a pre-distribution
to carry and placed on the 90.1 table.
But what it is not is it's not double-counting
and it's not an abuse of discretion.
It's a finding that the court trusted the process for
how the loan was obtained or how the loan was
calculated and agreed where it should
be placed on the 90.1 table.
Now the distributions included a lot of things
that Nodak Electric paid for the parties.
In Kerri's case, Nodak Electric paid for her truck,
paid for the loan, and made payments.
I don't know if it also paid for other parts of the
truck, but it also paid for children's expenses,
for expenses that the parties agreed were children's
expenses, like races, like travel to hockey games,
like other hockey expenses.
And the parties agreed to split these 50-50,
but that meant that part of that was going to be
recorded as a shareholder loan to Kerri,
and part of that was going to be recorded as a
distribution to Matt.
It's still money that needed to be accounted for on the
table, and the court did so in an appropriate way.
It was not an abuse of discretion to do so.
If you don't have any other questions, I'll sum up.
- Counsel, I have a quick question
on the Alaska Airlines miles.
- Oh, okay.
The court and its findings on that issue relied upon
the reasoning that was provided by Ms. Stoltenberg
in, I think it was the October 23rd, 2023.
I think the court says 2021,
but 2023 filing related to the Alaska Airlines miles.
So, there's this position that's explained.
And then I recognize that,
I think Mr. Rehak addressed his position in either
argument or statement at some point that they should
just be split with the valuation as of time of trial.
But was there any other argument or position put
forward about why that was the correct method
as opposed to what
Ms. Stoltenberg was advocating for?
- It was put forth in
the opening argument of Matt Rehak.
And in that opening argument, the lawyer said,
"We believe that you have to value assets as of the
time of trial.
And this is the value of the asset at the time of
trial, and those should be split 50-50.
He did not...
That was the extent of the argument of analysis.
But that is handy because that's the law in Alaska.
You value assets as of the time of trial,
and if you're not going to value assets as of the time
of trial, you have to make specific findings that
explain why you're deviating from this course.
And there are no specific findings
in this opinion that would justify that.
- Sorry, I tricked you.
- No, that's okay.
If this court accepts Kerri's application of cumulative
error to a property division in a divorce case,
this sets up a system that incentivizes litigants
to pursue all errors, no matter how trivial.
This has never been the case law in Alaska,
and there is no good reason to change that.
The court is not a coffee shop.
You do not get a new trial if
you collect 10 punches on your card.
All the issues raised by Kerri were within
the sound discretion of the trial court.
For there to be cumulative error,
there must first be error, and there certainly wasn't.
Thank you.
- Thank you.
- Thank you.
I would like to first address
the shareholder loan and the truck.
It's Kerri's position that it was double-counted.
It appears on one of the beginning spreadsheet lines
with agreed-upon value of about $24,000.
But then it's also incorporated into the shareholder
loan to the tune of $36,000.
And they did this by calculating all the payments made
by Nodak from 2016 onward until the truck was paid
in early 2021.
So, this was inappropriate because
they were married then.
They should not have been including money
that was for their marital asset, you know,
from 2016 to date of separation.
It should have been calculated date of separation,
the last payment made.
So, if anything is going to be added to Kerri
shareholder loan, possibly the payments that were made
in 2021 after data separation would be appropriate,
but not the whole entire 2016 to date of separation.
And so by doing this, by including all of that,
they effectively double-counted the truck by having it
on the asset sheet and then
also incorporated into that loan.
Regarding the Alaska Airlines miles,
the rationale for the division was laid
out in that brief, and I think the court referenced it
in the findings, but I'm not entirely sure.
But kind of the rationale for that
was in the stipulation, the April 19th,
2021 stipulation, record 5462.
The court did make a finding about the miles.
It said, "Both parties shall have access to the count.
Matt shall give her the password
so she can use the miles as she needs.
And this never happened.
And so Matthew was able
to use the miles as he saw fit.
- Was that the stipulation, though?
It's hard to keep track because there were a couple of
stipulations, and they didn't last through trial.
And there was a stipulation that was essentially, like,
here's how we're going to treat things,
and we're holding this in abeyance.
And if it doesn't work out,
and we need to proceed with the divorce,
then we need to proceed with the divorce.
Was the miles part of that stipulation?
- I believe so.
It was the April 19th, 2021.
- So, would it have lasted past the point
where the parties decided, "Nope,
we are proceeding with the divorce?"
I think so because the parties relied on portions of
that stipulation right up until the, well, actually,
right up until the recent custody findings,
because there was a finding about custody
exchange in there.
And that remained in effect this
entire time until just recently.
And so I believe that since that was relied upon
and wasn't changed by subsequent orders,
that the miles should also have been relied upon
as it wasn't addressed in subsequent orders either.
Then, finally, I wanted to touch
on very quickly the Ameritrade bosses.
The court had referenced Jones,
which is one of the cases that we relied upon.
And in Jones, the court there found that Mr. Jones
should not be...that his past gambling should not
negate his otherwise upstanding life.
He made a good income.
He provided well for his family.
The fact that he gambled
shouldn't have negated this.
And likewise, you know,
the fact that Kerri made poor investment decisions
over a three-year period, four years
before the marriage or the divorce was even held.
- She didn't tell them about those.
She didn't tell them about that stuff, right?
- Correct. Right.
- And Jones didn't say, you know,
bygones with respect to the gambling.
I think what it did is sort of made it clear that we
don't consider moral or character misconduct when it
comes to property division in a divorce,
but if there's economic misconduct by which we analyze
certain factors, then at least particular dissipation
or waste would result in recapture.
And it kind of said, "Here's what we look at.
It's possible that the gambling squares with that.
And so sent it back to the trial court.
And if it was waste or dissipation,
then there needed to be recapture."
That seems like what the court did in...
- Well, whether that's true,
or I accept what you're saying is true, actually,
but I think the other main issue
is there was no intent found on Kerri's part.
You know, the record shows that she had, in 2008,
successfully invested Matt's 401(k),
brought it from $13,000 to $113,000,
and that's transcript 989 to 991.
- Ms. Luce, you need to wrap up now.
- Okay, thank you.
She thought she could repeat this performance
in 2015 and again benefit the marriage.
She didn't have an intent to deprive.
When losses occurred, she properly documented them.
And when she eventually realized
that this is not good, she stopped.
She stopped.
She never did it again for four years.
And then the marriage dissolved.
And I believe that that should indicate that there was
no intent, and then thus no cause for recapture.
Thank you.
- Thank you both for your briefing
and your arguments here today.
As you know, we will take this matter under advisement
and issue a written opinion at a later date.
We're in recess now until our next argument at 10:00.
Thank you.