In re the Marriage of Morton and Lee
2016 COA 1
Colo. Ct. App.2016Background
- Married ~6 years; husband employed as a firefighter; wife worked intermittently and pursued education as a radiologic technologist and later sonography.
- Wife incurred student loans during the marriage and during the parties’ predecree separation; record showed conflicting totals (variously ~$33k–$45k).
- Trial court classified $6,449 of the loans as marital debt and $33,000 as wife’s "separate debt," and found the loans were a resource of $30,664 when awarding maintenance.
- The court awarded wife $850/month maintenance for ten months, premised in part on treating loan proceeds as reducing her needs.
- Wife appealed, arguing (1) loans incurred during marriage/separation are marital debt and not separate, (2) student-loan proceeds cannot be treated as a financial resource or income when setting maintenance, and (3) court erred by deciding maintenance before completing property division.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Classification of student loans as "separate debt" | Loans taken during marriage or predecree separation are marital debt; court erred labeling post-separation loans as separate | Court treated loans taken after separation as separate because disbursed after separation and petition | Reversed: loans incurred during marriage or predecree separation are marital debt; court must include total loans as marital debt and then equitably allocate payment responsibility on remand (court may still assign payment to incurring spouse in discretion). |
| Treating student-loan proceeds as a "financial resource" for maintenance | Loan proceeds are not a proper financial resource/income for maintenance because they are repayable liabilities and net to zero; using them improperly reduces maintenance | Loans increased wife’s cash flow and had historically subsidized living expenses; thus could be considered a financial resource | Reversed: trial court erred to treat loan proceeds as a financial resource or income for maintenance; loans may not be considered when setting maintenance. |
| Awarding maintenance before dividing property | Property division affects available resources and reasonable needs; court must divide property before awarding maintenance | Trial court awarded maintenance based on its property allocations and income findings | Reversed: court must first divide marital property/debts, then determine maintenance; both must be decided before attorney-fee awards. |
| Attorney fees (trial & appellate) | Wife sought fees; trial court awarded some fees; on appeal wife withdrew appellate fee request | Husband sought fees as frivolous appeal | Trial court’s attorney-fee award vacated because property and maintenance orders reversed; appellate request for fees denied (appeal not frivolous). |
Key Cases Cited
- In re Marriage of Speirs, 956 P.2d 622 (Colo. App.) (student loans obtained during marriage constitute marital debt; court may nevertheless assign payment to incurring spouse)
- In re Marriage of Burford, 26 P.3d 550 (Colo. App.) (debts incurred during predecree separation are marital)
- In re Marriage of Balanson, 25 P.3d 28 (Colo.) (errors in property division are reversible when they affect substantial rights)
- In re Marriage of Wells, 850 P.2d 694 (Colo.) (on remand court must consider parties’ economic circumstances at time of remand)
- In re Marriage of Huff, 834 P.2d 244 (Colo.) (court must divide property before determining maintenance entitlement)
- Jones v. Jones, 627 P.2d 248 (Colo.) (maintenance decision depends on property division)
- In re Marriage of Bowles, 916 P.2d 615 (Colo. App.) (deference to trial court where evidence unclear)
- In re Marriage of Morehouse, 121 P.3d 264 (Colo. App.) (court not required to divide marital debts equally)
- In re Marriage of Hill, 166 P.3d 269 (Colo. App.) (financial resources include income, assets, liabilities — cited for comparison)