Joseph Vandal v. Stephanie F. Vandal, 74930-7

Background

Joseph and Stephanie Vandal divorced after a long marriage in which Joseph operated a CPA practice he started before marriage; the trial court divided property and awarded Stephanie an equalizing payment and maintenance.
The trial court found the business (Joseph J. Vandal, CPA, P.S.), its bank accounts, and related assets were community property and valued the business at approximately $446,000.
Trial findings: extensive commingling of business and community funds, community-paid family expenses via business transfers, post-separation withdrawals, and that goodwill was largely attributable to Joseph’s ongoing labor.
The court awarded Stephanie $287,680 (equalizing payment) and $9,000/month maintenance for 72 months; Joseph was also charged with reimbursements/ judgments for unauthorized withdrawals and mortgage shortfalls.
Joseph appealed challenging (1) characterization of the business as community property, (2) alleged double counting of business bank accounts in the distribution, and (3) the overall equity of the distribution and maintenance award.

Issues

Issue	Joseph's Argument	Stephanie's Argument	Held
Characterization of business as community property	Business predated marriage and was presumptively separate; Stephanie failed to rebut presumption	Business lost separate character by commingling, unpaid loans, and goodwill produced by marital labor	Affirmed: substantial evidence (commingling, unreconciled transfers, goodwill from Joseph’s toil) overcame presumption of separateness
Commingling and entitlement to compensation for spouse’s toil	Minimal commingling; salary and business distributions adequately compensated community	Income was not segregated; salary ($70,000) was inadequate; community entitled to goodwill portion	Affirmed: community labor created goodwill; salary insufficient; contemporaneous segregation absent
Double counting of business bank accounts	Business valuation included liquid assets and the court also awarded business accounts, so accounts were awarded twice	Valuations used different dates (business as of 12/31/2014; accounts as of separation 8/2/2014); post-separation withdrawals affected balances	Affirmed: no abuse of discretion; Joseph failed to trace specific funds or seek reconsideration; differing valuation dates justified awards
Maintenance and overall equity of distribution	Maintenance and obligations exceed Joseph’s ability given debts, child support, and judgments; award inequitable	Maintenance appropriate given Stephanie’s need, standard of living, marriage length, and Joseph’s income; judgments resulted from Joseph’s misconduct	Affirmed: maintenance within trial court’s broad discretion and justified despite judgments tied to Joseph’s violations of court orders

Key Cases Cited

In re Marriage of Griswold, 112 Wn. App. 333 (review standard for characterization of property)
In re Estate of Borghi, 167 Wn.2d 480 (presumption of separate property and rebuttal by intent to transmute)
In re Marriage of Skarbek, 100 Wn. App. 444 (commingling converts separate funds to community unless clearly traced)
In re Marriage of Brooks, 51 Wn. App. 882 (professional goodwill is divisible property)
In re Marriage of Hall, 103 Wn.2d 236 (definition and treatment of goodwill)
Pollock v. Pollock, 7 Wn. App. 394 (requirement to segregate income if separate business combines with personal services)
In re Marriage of Wallace, 111 Wn. App. 697 (trial court discretion in property distribution and consideration of waste/ concealment)