420 P.3d 1180
Alaska2018Background
- Charles and Amy Wiegers divorced after ~30 years of marriage; trial occurred Dec 2015–May 2016 and divorce finalized 2016.
- Charles owned ~47% (7,652 shares) of closely held A & A Roofing Co., which used a longstanding in-house "Method 2" liquidation formula to set share price; shareholders unanimously recorded $179/share as of Jan 1, 2015.
- Amy retained PERS Tier 1 retirement health benefits that vested in 1985 (pre-marriage); she worked for the University through Jan 1999, accruing 11.7 years of PERS service during the marriage.
- The superior court valued A & A stock at $217/share using a court-adopted "true asset" (asset-approach) valuation based on Amy’s valuation expert’s testimony and the company records.
- The superior court ruled as a matter of law that Amy’s vested PERS retirement health benefits were premarital (non-marital) property.
- On appeal the Alaska Supreme Court affirmed the stock valuation but reversed the characterization of the retirement health benefits and remanded for valuation and reconsideration of equitable distribution.
Issues
| Issue | Appellant (Wiegers) Argument | Appellee (Richards-Wiegers) Argument | Held |
|---|---|---|---|
| Fair market valuation of A & A Roofing stock | Court erred; should use company’s Method 2 value of $179/share derived from shareholder agreement | Method 2 is a liquidation formula; asset (true-asset) approach is appropriate; court may rely on valuation expert | Affirmed: $217/share using true-asset approach supported by expert testimony and company records |
| Characterization of Amy’s PERS retirement health benefits | Entire benefit is marital to extent funded during marriage; Sparks was overruled by Engstrom so some portion is marital | Benefits vested pre-marriage and therefore are non-marital (court below followed Sparks) | Reversed: Engstrom controls—portion funded during marriage is marital; remand to value and allocate marital portion |
Key Cases Cited
- Engstrom v. Engstrom, 350 P.3d 766 (Alaska 2015) (holding that continued work during marriage funds even fully vested retirement benefits and governs coverture/funding analysis)
- Sparks v. Sparks, 233 P.3d 1091 (Alaska 2010) (held pre-marriage vesting could render retirement health benefits non-marital where marital work did not increase benefit value)
- Hansen v. Hansen, 119 P.3d 1005 (Alaska 2005) (introducing coverture fraction to calculate marital portion of benefits)
- Miles v. Miles, 816 P.2d 129 (Alaska 1991) (expert valuation testimony is an adequate basis for court business valuation)
- Krize v. Krize, 145 P.3d 481 (Alaska 2006) (clarifying clear-error standard for business valuation and when record lacks reliable valuation evidence)