[WSBAPT] CP Interest in Originally Separate Property

Wed Nov 27 08:55:30 PST 2019

Maybe. It sounds like all funds expended on the house were community (post-marital earnings), so the community (not H alone) has a possible equitable lien for reimbursement.

Part of the lien would be for actual improvements to the property. Expenditures for repair and maintenance are highly unlikely to cause a lien to arise. I generally think of it as, "repair and maintenance" is taking something in the house from "bad" condition to "good" condition, while an "improvement" is adding something new to the house (extra bathroom, roof dormer) or significantly upgrading quality (complete renovation of the kitchen with new wiring, better cabinets, higher-end appliances, etc.), such that an appraiser would re-evaluate the house in terms of its features, not just change its general condition from, say, "average" to "good."

The measure of the lien differs depending on what it is reimbursing for. If it's payments on a purchase-money loan that was W's separate obligation, the measure is typically the total amount of payments made by community funds. If it's money spent to improve the real property, or direct community labor of the non-owning spouse to improve the real property, the measure is typically the change in market value of the property before and after the improvement.

The bad news is: the community expenditures are offset by the benefit to the community derived from being able to live at the residence.

Three key helpful case are In re Marriage of Elam, 97 Wn.2d 811, 650 P.2d 213 (1982); Miracle v. Miracle, 101 Wn.2d 137, 675 P.2d 1229 (1984); In re Marriage of Pearson-Maines, 70 Wn.App. 860, 855 P.2d 1210 (1993). But the situation is very complicated and convoluted. You should check out the WSBA Community Property Deskbook, Ch. 3.4. It's available through Casemaker Libra<https://washington.casemakerlibra.com/home/login.aspx> (different from free Casemaker) and it's only $60.00 to get access to that one book for a year.

Here's an excerpt from that Chapter 3.4:

Understanding the decisions is complicated by the terminology employed by the courts, particularly in the early decisions. The courts have referred to the "community estate" and the "separate estate(s)" as if three legal entities existed independent of the husband and wife involved. Accurate discussion requires use of the term "character" as denoting the quality of property being either the husband's separate, the wife's separate, or community property.

As noted, Washington courts seem satisfied that when an improvement is made upon property of a character different from that used for the improvement, the character of the asset improved remains unchanged. The character of the improvement becomes the same as that of the improved property. As stated in Conley v. Moe, 7 Wn.2d 355<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=7+Wn.2d+355&fn=Washington%20Community%20Property%20Deskbook>, 360, 110 P.2d 172<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=110+P.2d+172&fn=Washington%20Community%20Property%20Deskbook> (1941):

[T]he status of property, whether real or personal, becomes fixed as of the date of its purchase or acquisition, and remains so fixed unless changed by deed, by due process of law, or by the working of some form of estoppel.

Accord Baker v. Baker, 80 Wn.2d 736<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=80+Wn.2d+736&fn=Washington%20Community%20Property%20Deskbook>, 498 P.2d 315<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=498+P.2d+315&fn=Washington%20Community%20Property%20Deskbook> (1972); Leroux v. Knoll, 28 Wn.2d 964<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=28+Wn.2d+964&fn=Washington%20Community%20Property%20Deskbook>, 184 P.2d 564<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=184+P.2d+564&fn=Washington%20Community%20Property%20Deskbook> (1947); In re Pugh's Estate, 18 Wn.2d 501<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=18+Wn.2d+501&fn=Washington%20Community%20Property%20Deskbook>, 139 P.2d 698<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=139+P.2d+698&fn=Washington%20Community%20Property%20Deskbook> (1943); Strand v. Pekola, 18 Wn.2d 164<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=18+Wn.2d+164&fn=Washington%20Community%20Property%20Deskbook>, 138 P.2d 204<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=138+P.2d+204&fn=Washington%20Community%20Property%20Deskbook> (1943); White v. White, 105 Wn. App. 545<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=105+Wn.+App.+545&fn=Washington%20Community%20Property%20Deskbook>, 553, 20 P.3d 481<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=20+P.3d+481&fn=Washington%20Community%20Property%20Deskbook> (2001).

In the court's view, such improvements upon property do not change the legal title to it, but do subject it to certain equities that give rise to a right of reimbursement secured by an equitable lien on it. Conley, 7 Wn.2d at 361. Similarly, payments on a mortgage obligation or purchase contract give rise to a right of reimbursement. Fritch v. Fritch, 53 Wn.2d 496<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=53+Wn.2d+496&fn=Washington%20Community%20Property%20Deskbook>, 335 P.2d 43<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=335+P.2d+43&fn=Washington%20Community%20Property%20Deskbook> (1959) (purchase contract); Merkel v. Merkel, 39 Wn.2d 102<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=39+Wn.2d+102&fn=Washington%20Community%20Property%20Deskbook>, 234 P.2d 857<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=234+P.2d+857&fn=Washington%20Community%20Property%20Deskbook> (1951) (mortgage); Farrow v. Ostrom, 16 Wn.2d 547<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=16+Wn.2d+547&fn=Washington%20Community%20Property%20Deskbook>, 133 P.2d 974<http://links.casemakerlegal.com/states/WA/books/Case_Law/results?ci=14&search%5bCite%5d=133+P.2d+974&fn=Washington%20Community%20Property%20Deskbook> (1943) (purchase contract).

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Paul Neumiller
Sent: Wednesday, November 27, 2019 8:13 AM
To: wsbapt at lists.wsbarppt.com; wsbarp at lists.wsbarppt.com
Subject: [WSBAPT] CP Interest in Originally Separate Property

Listmates (sorry for the double post):  I need those fancy litigator string of cases for the following situation:    Wife ("W") acquires residence prior to marriage.  After marriage, W's and H's paychecks are used to pay, fix, and improve residence and pay on a loan for the residence.  H spends hours on house and yard.  H pays for some payments out of his own disability checks from worker's comp.  Is there any possibility that H has acquired a community property interest in the residence?  I don't need to prove the actual percentage or dollar amount at this point, just the possibility of H acquiring a community property interest (or some kind in interest) in the residence.  Thanks.  (this is far-afield of my area and I don't even have the proper books on where to find the answer.)

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