February 11, 2009

New Case Law – splitting up the house

As a Portland Oregon divorce law firm, Stephens & Margolin LLP is dedicated to keeping up to date on Oregon Court of Appeals and Oregon Supreme Court opinions.  As a service of The Oregon Divorce Blog, we will be providing updates as new opinions come out.

On February 11, 2009, the Oregon Court of Appeals published an opinion in Branam and Beaver.  The case is an appeal from a trial court ruling on the division of assets in a long term domestic partnership.  The main question before the court was how to divide the proceeds from the sale of the parties’ home.

Beaver and Branam are a man and woman who lived together in a domestic partnership but never married. Branam had received an inheritance from her former husband. She used part of the money to buy a house. The parties never discussed what would happen if they decided to separate. When Beaver moved into the house, Branam agreed to put his name on the house. Beaver argued that this meant that he owned half the house and should receive half of the equity in the house after they broke up. Beaver said that she never intended for him to receive the money originally paid for the house and that she added his name as a way to insure that he could live in the house if she died.  The parties sold the house and the trial court decided to award half of the apprectiation of the value of the house to each party and to award 100% of the original value to Branam.  On appeal, Beaver contends that the court erred in reimbursing the purchase price to Branam.

In its opinion, the court of appeals explainst that Oregon law, based on the court of appeals’ ruling in Beal and Beal and that case’s progeny, provides that, in the dissolution of a domestic partnership, courts are required to divide property according to the express or implied intent of the parties at the time that they established their partnership. If the court cannot discern the parties’ intent, the court may exercise its equitable powers to reach a fair dissolution of the parties’ partnership. How the parties held legal title to real property is evidence of the parties’ intent, but it is not dispositive. Where there is no express agreement of the parties regarding the division of their property in the event of dissolution of their domestic partnership, “courts should closely examine the facts in evidence to determine what the parties implicitly agreed upon.” Beal, 282 Or at 122. The court then looks at the following factors to determine the intent of the parties: 1. Inferences drawn from the way the parties lived; 2. The fact of cohabitation can be evidence of an intent to share incomes during the time the parties live together; and 3. Joint acts of a financial nature (joint checking account, joint savings account, joint purchases, etc…) may give rise to an inference of a intention to share equally. Where the evidence establishes that parties in a domestic partnership intend to share property equally but one party makes a greater initial contribution to the property, the property will be divided equally but the party making the greater initial contribution will be credited for that contribution.

In this case, since there was no evidence that the parties intended to split the initial contribution made by Branam, it was proper for the court to split the appreciation in the property equally, but to award the initial purchase price to Branam.

The entire opinion can be found at http://www.publications.ojd.state.or.us/A133414.htm.

The case teaches us that unmarried couples who intend to share their financial lives would be well advised to set forth their intentions in a formal document.  If not, the court will decide for them how to split up their possessions and finances when they break up.

The lawyers, including Daniel Margolin, who focuses part of his pratice on family law appeals, at Stephens & Margolin LLP can assist parties going through the dissolution of a domestic partnerhip or who want information on dometic partnership agreements and in better understanding the law in Oregon regarding divorce. If you have any questions about Oregon appellate law please contact Daniel Margolin or C. Sean Stephens at Stephens & Margolin LLP