March 24, 2010

New Case Law – Treatment of Appreciation of Separate Asset During Marriage

The Oregon Court of Appeals published an opinion in Fields and Fields on March 24, 2010.  The entire opinion can be viewed here:

The case dealt with the treatment of wife’s separately held company.  Wife was given the company by her parents prior to the marriage.  She kept the company in her sole name throughout the marriage.  Husband provided a significant amount of work for the company and the parties used the company’s income during the marriage.  The trial court ruled that husband was not entitled to a award to equalize the value of the company to wife. 

The court of appeals held the the trial court was mistaken and, that while wife had rebutted the presumption of equal contribution with regard to her initial acquisition of the property that she had not done so with respect to the company’s appreciation during the marriage.  ORS 107.105(1)(f) requires that the division of marital property be “just and proper” under the circumstances.   Marital assets are subject to a rebuttable presumption of equal contribution and ownership, which applies to property acquired by a spouse by gift during the marriage.   The appreciation in value of a separately held asset is a marital asset that is also subject to the rebuttable presumption of equal contribution.  A spouse rebuts the presumption of equal contribution with respect to the appreciation of a separately held asset if he or she proves that the other spouse did not contribute either directly or indirectly to its appreciation.  Here, wife could not rebut the presumption.

The court of appeals awarded husband one half of the appreciation of the company during the marriage.