In re the Marriage of Massee

LANDAU, J. Wife appeals from a dissolution of marriage judgment, assigning error to the trial court’s property division. On de novo review, ORS 19.125(3), we affirm. The parties were married in February 1991. At the time of the trial, husband was 61 years of age and wife was 44. Husband has been a farmer for most of his adult life, and at the time of the marriage he owned substantial business and real estate holdings. Those holdings included the Mission Nut Company, the Mission Cherry Company, a farm, a residence, a large tract of land known as the “bayou property” and commercial buildings in Salem and Wilsonville. The building in Wilsonville contained a hardware store business and related machinery and equipment, all of which husband owned before the parties’ marriage. The trial court determined that husband’s net worth at the time of the marriage was in excess of $3.5 million. Wife brought into the marriage a car and some personal items. Before the marriage, wife had worked as a clerk at a local bank and completed a variety of classes at Chemeketa Community College. At the time of the marriage, she was working as a manicurist and her principal source of income was from the sale of stocks given to her by her mother. During the first year of marriage, wife did a “limited quantity” of work as a manicurist. She also worked for no more than four months as manager of husband’s hardware store. She was not paid for her services. According to husband, the parties had an agreement: “[T]here was no income generated from the store. And the agreement, if she would go ahead and run the store, [was] that she could eventually end up with the store. And that was left that way. So as soon as the store would be making a profit, there would be some consideration for wages or whatever at that time.” In November 1991, wife stopped working at the hardware store. She took approximately $5,000 from the hardware business account. About $1,500 of that money was spent on legal fees and, according to wife, the remainder was returned. — 592 — Wife also worked between 45 hours and 70 hours during one hazelnut harvest and was paid for that work. She worked between 10 hours and 50 hours during a cherry harvest and was not paid for that work. In addition, wife was “responsible for entertaining with and providing refreshments for the farmers when they’re waiting to — [she] was supposed to bring out something cold for them to drink when [she] came out while they were waiting to be unloaded.” She testified that she did that during one year. In addition, she helped maintain the yard around the family home, and she did an unspecified amount of cooking, laundry and “errands” over an unspecified number of months. Wife’s name was not placed on any of husband’s property, and she did not contribute any of her separate monies to the upkeep or improvement of the businesses, equipment and properties that husband brought into the marriage. Throughout the marriage, husband kept all of his accounts separate from wife’s, with the exception of one joint checking account used solely by wife. Into that joint account, husband would typically deposit $550 a month, which wife used for groceries, clothing and incidental expenses. The home mortgage and all improvements, repairs and utilities were paid for by husband from his separate accounts. The parties separated for a week in August 1991 and again for two months beginning in late 1991. Their final separation occurred in early 1993, and husband filed for dissolution of the marriage in February 1993. After a hearing, the trial court concluded that the financial affairs of the parties had not been commingled, that the parties could be easily restored to their premarital financial positions and that the property division should be in the nature of a rescission “notwithstanding whatever appreciation occurred in the assets. ’ ’ Accordingly, the court awarded wife the property she brought into the marriage and six months of spousal support at $1,750 per month. Wife also was awarded most of the personal property jointly acquired during the marriage, with an approximate value of $17,250. The trial court awarded husband all of the interest in the assets that he had brought into the marriage. On appeal, wife assigns error to that division of property. Wife argues that she should have been awarded a — 593 — share of the appreciation in the assets that husband brought into the marriage. She argues that application of the “rescission method” without regard to ORS 107.105(l)(f) is improper, because it “avoids proper recognition of the efforts of a spouse as a homemaker,” and “skirts the presumption of equal contribution.” Husband contends that it was proper to apply the rescission method to the appreciation of assets brought into the marriage by husband, because the parties’ financial affairs have not been commingled and the parties can be easily restored to their premarital positions.1 To determine whether wife is entitled to share in the appreciation of assets that husband brought into the marriage, we begin with ORS 107.105(l)(f), which provides: “(1) Whenever the court grants a decree of marital annulment, dissolution or separation, it has power further to decree as follows: * i|c % # “(f) For the division or other disposition between the parties of the real or personal property, or both, of either or both of the parties as may be just and proper in all the circumstances. A retirement plan or pension or an interest therein shall be considered as property. The court shall consider the contribution of a spouse as a homemaker as a contribution to the acquisition of marital assets. There is a rebuttable presumption that both spouses have contributed equally to the acquisition of property during the marriage, whether such property is jointly or separately held. * * * The present value of, and income resulting from, the future enhanced earning capacity of either party shall be considered as property. The presumption of equal contribution to the acquisition of marital property, however, shall not apply to enhanced earning capacity.”2 — 594 — In construing ORS 107.105(l)(f), we first examine its text and context. PGE v. Bureau of Labor and Industries, 317 Or 606, 610-12, 859 P2d 1143 (1993). We also examine, at the first level of our interpretive analysis, prior judicial construction of the statute. Liberty Northwest Ins. Corp. v. Koitzch, 135 Or App 524, 526, 899 P2d 724 (1995). If that inquiry does not clearly reveal the legislature’s intentions, we look also to the legislative history of the statute. PGE, 317 Or at 610-12. The question in this case is whether the trial court erred in applying the rescission method without regard to the presumption that wife had contributed equally to the acquisition of the marital appreciation of the home and businesses. More precisely, we must decide whether appreciation is “property” and, if so, whether that property was “acquired” during the parties’ marriage and is therefore subject to the presumption of equal contribution.3 We conclude that it is. The text of ORS 107.105(l)(f) states that there is “a rebuttable presumption that both spouses have contributed equally to the acquisition of property during the marriage.” By its terms, the presumption of equal contribution applies to all “property” that is “acquired” during marriage. “Property” is commonly understood to mean “something that is or may be owned or possessed: WEALTH * * * the exclusive right to possess, enjoy, and dispose of a thing: a valuable right or interest primarily a source or element of wealth: OWNERSHIP * * *.” Webster’s Third New International Dictionary 1818 (unabridged ed 1976). “Acquire” generally means “1: to come into possession, control, or power of disposal of often by some uncertain or unspecified means <had accumulated for her about as much money as she had herself acquired — Arnold Bennett> 2: to come to have as a characteristic, attribute, trait or ability often by sustained effort[.] ’ ’ — 595 — Id. at 18. (Boldface and italics in original.) Certainly, appreciation is wealth, or at least an element of wealth, that can be controlled or disposed of. And, just as clearly, appreciation that takes place during marriage is “acquired” during marriage; a person “gains,” “attains” or “come[s] into * * * control, or power of disposal” over the increased value of an appreciated asset as that asset appreciates. If that appreciation takes place during the marriage, it is acquired during the marriage. We are mindful that dictionary definitions do not necessarily reflect the legislature’s intentions. See Brian v. Oregon Government Ethics Commission, 320 Or 676, 684-89, 891 P2d 649 (1995); State v. Holloway, 138 Or App 260, 265, 908 P2d 324 (1995). Accordingly, we examine whether the statutory context in which the words are used demonstrates that the legislature intended the terms “property” and “acquired” to be given what we understand to be their ordinary meanings. ORS 107.105(l)(f) states that a “retirement plan or pension or an interest therein shall be considered as property.” Retirement plans and pensions increase in value, or appreciate, throughout their existence, and the “value” of such an increase is “property” within the meaning of ORS 107.105(l)(f), regardless of when the plan originally vested. Richardson and Richardson, 307 Or 370, 377, 769 P2d 179 (1989). To the extent that the increase in value accrues during marriage, it is “acquired” during marriage. As such, it is subject to the presumption of equal contribution. Id. Similarly, ORS 107.105(l)(f) requires that the “present value of, and income resulting from, the future enhanced earning capacity of either party shall be considered as property.” It is noteworthy that the legislature has explicitly mandated that the “income” from future enhanced earning capacity is to be considered as property. It would make little sense to treat income from an asset as property but not appreciation of that asset. As one leading commentator has observed: “[T]he difference between income and appreciation is a matter of pure form which has no relation to the policies behind equitable distribution. * * * Income and appreciation are fundamentally similar, as they are both ways in which old — 596 — property generates new value. The only difference between the two concepts is a difference of form: income takes the form of a new asset, while appreciation takes the form of added value to an old asset. Because income and appreciation differ only in form, any attempt to distinguish between the two must inevitably partake of form rather than substance.” Brett Turner, Equitable Distribution of Property 225-26 (2d ed 1994); see also Barth Goldberg, Valuation of Divorce Assets 62 (1994 Supp) (characterizing the distinction between income and appreciation as “splitting hairs”). Indeed, the provision plainly requires that the enhancement of earning capacity itself be treated as “property.” Although it is specifically excepted from the presumption of equal contribution, the appreciation of that asset is nevertheless statutorily treated as “property.” If we are to avoid treating the same word differently in the same section of the statute, we must recognize that “property” is to be construed broadly and that it includes the enhanced value of other assets as well, even where the title or possessory interest in those assets may have been obtained before the marriage. In sum, the text and context of ORS 107.105(l)(f) indicate that appreciation is property and, to the extent that it occurs during marriage, it is acquired during the marriage. Accordingly, it is subject to the presumption of equal contribution, regardless of who brought the property into the marriage. That reading of the statute is consistent with our prior case law concerning the statutory presumption. Our decision in Kampmann and Kampmann, 108 Or App 407, 816 P2d 642, mod on other grounds, 110 Or App 100, 820 P2d 1379 (1991), is illustrative. In that case, the husband brought into the marriage a number of parcels of real property, which appreciated during the parties’ eight-year marriage. The trial court awarded the wife half of the increase in value of the property during the marriage. On appeal, the husband argued that, because of the relatively short-term duration of the marriage, the court should place the parties in the financial position they would have occupied had no marriage occurred; in other words, the trial court should not have awarded the wife any of the appreciation in the value of the real estate that the husband had brought into the marriage. We rejected the husband’s argument: — 597 — ”As a general rule, both spouses are entitled to share in any increase in value of marital assets that occurs during the marriage, ORS 107.105(l)(f); see Card and Card, 60 Or App 117, 120, 652 P2d 866 (1982), even if one spouse was the source of all of the parties’ assets at the beginning of the marriage.” Id. at 410; see also Carlacio v. Gebrayel, 121 Or App 329, 335, 854 P2d 981 (1993); Langan and Langan, 89 Or App 320, 326, 748 P2d 1035, rev den 305 Or 433 (1988); Olinger and Olinger, 75 Or App 351, 354-55, 707 P2d 64, rev den 300 Or 367 (1985); Caverly and Caverly, 65 Or App 98, 101, 670 P2d 199, rev den 296 Or 236 (1983). The concurrence argues that our reading of the statute is contrary to Pierson and Pierson, 294 Or 117, 653 P2d 1258 (1982), and Engle and Engle, 293 Or 207, 646 P2d 20 (1982), in which the Supreme Court held that the presumption of equal contribution does not apply to assets brought into the marriage by either party. The concurrence’s argument, however, merely begs the question by assuming that an increase in the value of such property during the marriage is not an asset that was acquired during the marriage. Neither Pierson nor Engle said anything about that. The concurrence and husband argue that our decision that the presumption applies to increases in the value of property brought into a marriage also cannot be reconciled with the straightforward application of the “rescission rule” in Miller and Miller, 294 Or 660, 661 P2d 1361 (1983), and Rolie and Kunkel, 127 Or App 428, 873 P2d 397 (1994). Both the concurrence and husband misunderstand the relationship between the presumption of equal contribution and the so-called “rescission rule.” The rescission rule originated in our decision in York and York, 30 Or App 937, 569 P2d 32 (1977), which predated the adoption of the statutory presumption contained in ORS 107.105(1)(f). In that case, the husband had brought into the two-year marriage a number of assets, the value of which had not substantially increased during that time. We held that, “[w]hile both parties should share in the increase in value of marital assets, the general approach in dividing property after a short-term marriage is to place the parties as nearly as possible in the financial position they would have held if no marriage had taken place.” — 598 — 30 Or App at 939. (Citations omitted.) In Miller, which was decided after the enactment of the statutory presumption, the parties disputed whether the increase in value of certain assets that the wife brought into their five-year marriage should be shared with the husband. The court cited York with approval, and held that, on the facts of that case, it was best to put the parties in the financial position that they would have held had no marriage taken place. The court expressly avoided any discussion of the statutory presumption. It acknowledged that “there may have been and probably were increases in the value” of the assets wife brought into the marriage and that “any appreciation in value is arguably a ‘marital asset.’ ” Miller, 294 Or at 665-66. It nevertheless held that, on the facts of that particular case, it was appropriate to adopt a rescission approach and that that decision “eliminates the necessity of addressing” the issue of whether the presumption applied. Id. at 666. Thus, Miller stands for the unremarkable proposition that, regardless of whether the presumption applies, in some cases the facts may be such that it is nevertheless appropriate to refuse to divide an increase in the value of property brought into a marriage. See, e.g., Pugh and Pugh, 138 Or App 63, 71 n 5, 906 P2d 829 (1995) (although the presumption of equal contribution applies, and has not been rebutted, property remains subject to equitable distribution by the court under ORS 107.105(l)(f)). There is nothing in our reading of the statute that is inconsistent with Miller.4 Rolie does contain language that is at odds with our current and prior construction of ORS 107.105(l)(f). In that case, the parties each brought substantial personal property into their marriage. The husband also brought into the marriage real property. During the marriage, the parties combined their efforts to improve the real property and used the proceeds from its sale to purchase a new home. They kept their personal property separate. We held that, because the parties had “commingled their contributions regarding the — 599 — real properties,” and because the statutory presumption of ORS 107.105(l)(f) had not been rebutted, the wife was entitled to half the appreciated value of the real property. 127 Or App at 432. But as to the appreciation in the value of the personal property, we held: “Under the holding in Miller, the appreciation of each asset follows the asset and accrues to its restored owner without regard to ORS 107.105(l)(f).” 127 Or App at 434. (Emphasis supplied.) That statement was incorrect and cannot be reconciled with either ORS 107.105(l)(f) or the cases construing it. To the extent that Rolie suggests that the statutory presumption of equal contribution does not apply to appreciation in the value of property brought into a marriage, the case is overruled. We conclude, then, that the statutory presumption of equal contribution applies, and we turn our attention to whether that presumption has been rebutted. In Stice and Stice, 308 Or 316, 779 P2d 1020 (1989), the Supreme Court explained that “[t]he presumption of equal contribution to the acquisition of property during the marriage may be overcome by a finding that the property was acquired by one spouse uninfluenced directly or indirectly by the other spouse, i.e., the other spouse contributed neither economically nor otherwise to the acquisition of the property in issue.” Id. at 325-26. In this case, the record shows that any appreciation in the value of the property that husband brought into the marriage occurred without wife’s influence, direct or indirect. The businesses, real property and equipment have always been in husband’s name alone. All business accounts have been kept separate from wife, and wife had no power to draw funds from them. Husband made all financial contributions to the maintenance, operation and improvement of the businesses, and he alone was responsible for and paid all debts that were incurred in operating them. Husband alone was responsible for managing the businesses. Wife did briefly work as a manager of husband’s hardware store. She also worked for approximately one week on a single hazelnut harvest. She occasionally did “errands.” And she provided refreshments to visiting farmers one season — 600 — as they unloaded their crops. The record shows that, apart from those isolated instances of assistance, wife did not regularly contribute to the operation of the business or in any other way directly or indirectly contributed to the appreciation in the value of the assets at issue. We conclude that evidence of the clearly maintained separation of husband’s business, real estate and equipment assets from the balance of the parties’ property, as well as the evidence of husband’s sole purchase, maintenance, operation and improvement of those assets, is sufficient to demonstrate that any increase in the value of those assets that occurred during the marriage did not occur through the direct or indirect contributions of wife. Wife’s contributions, if any, were too brief and too sporadic to have had any significant effect on any appreciation that may have occurred. Wife insists that this case is controlled by our decision in Olinger, in which we determined that the presumption of equal contribution had not been overcome. In that case, however, we concluded that the parties had “clearly commingled their financial affairs,” that both parties had contributed to the down payment of the family home and one of the family businesses, and that the wife had “contributed her full-time earning to the [parties’] joint account.” 75 Or App at 355. That is not so in this case, because none of husband’s businesses or properties were commingled and wife made no contributions to them. Based on the record before us, therefore, we conclude that the presumption of equal contribution has been rebutted. Finally, we examine whether, even though the presumption of equal contribution has been rebutted, the trial court’s distribution of property was just and proper under all the circumstances. Stice, 308 Or at 326. Because of the short duration of the marriage, because husband’s assets were so clearly separated from the balance of the parties’ property and because of wife’s relatively insignificant contributions to any increase in the value of husband’s assets during the marriage, we conclude that the trial court’s decision not to award wife a portion of those assets was just and proper.5 — 601 — Affirmed. Costs, not including attorney fees, to husband. Footnotes [1] After they were married, the parties drafted a handwritten “Antenuptial Agreement,” which provides, in part: “Properties and assets owned previous to the marriage by [husband] or [wife] shall remain theirs as well as any properties obtained by inheritance or gifts after the marriage. “All acquisitions after the completion of the marriage shall be jointly owned.” Neither party argues that this agreement controls the resolution of this issue, nor did they below. [2] The 1995 amendments to ORS 107.105 do not affect the outcome of this case. See Or Laws 1995, ch 22, § 1; Or Laws 1995, ch 608, § 3. [3] The concurrence, for reasons unexplained, narrows its phrasing of the issue to whether the legislature intended that the statutory presumption apply to “passive” appreciation of property brought into the marriage. 138 Or App at 601. Suffice it to say that we have previously rejected the distinction between “active” and “passive” growth in property values in applying ORS 107.105(l)(f). Crislip and Crislip, 86 Or App 146, 150-51, 738 P2d 602 (1987) (“[t]hat distinction has no support in our cases and would produce unnecessary complications if we were to adopt it”). [4] Moreover, the concurrence’s reading of Miller makes no sense; if the presumption was effectively preempted by the rescission rule, then the court had no reason to suggest that the parties’ property likely increased in value during the marriage and that that increase arguably was an asset subject to the statutory presumption. [5] In the light of our disposition, we need not determine whether husband’s assets actually increased in value during the parties’ marriage.