November 11, 2010

New Case Law – post-separation mortgage payments and equal division

On November 10, 2010, the Oregon Court of Appeals published its opinion in Clapp and Clapp.  The entire opinion can be found here:

The case makes two important points:  1.  How to treat payments that one spouse made towards the mortgage on the family home in between separation and divorce; and 2.  When an equal division of assets is appropriate.

Wife in the case had paid on the mortgage for a number of months between the parties’ separation and the divorce trial.  The trial court did not give her any credit for her payments.  The Court of Appeals held that [i]n dividing property, the court may consider the treatment and payment of marital debt, including a mortgage, by the parties between their separation and the dissolution of their marriage.  Therefore, the court credited Wife for the full payments and provided her with an equalizing judgment for one-half of the amount she had paid.

The trial court made an unequal division of the parties’ assets, giving Husband more than half.  The trial court awarded Husband his full pensioin and stated that it would be unfair to create an equalizing judgment since Husband could not likely pay it.  The court of appeals found that to be error, stating that any expressed concern of the trial court regarding the financial hardship imposed by the property division can likely be ameliorated through the use of a qualified domestic relations order (QDRO) awarding a percentage of husband’s pension, a marital asset, to Wife.  

The court of appeals did state that an unequal division is sometimes appropriate where the facts support such a division.