In re Marriage of Lindsey

Whether the presumption established in Creasman v. Boyle should be abandoned when characterizing and distributing property acquired during a meretricious relationship that preceded marriage?¹⁶

The Creasman presumption provides that property acquired by a man and a woman not married to each other but living together as husband and wife is not community property. In the absence of some trust relation, it belongs to the one in whose name the legal title stands.¹⁷ It should be presumed as a matter of law that the parties intended to dispose of the property exactly as they did dispose of it.¹⁸ This presumption has caused considerable difficulty in subsequent litigation.¹⁹ It has been expanded far beyond its intended scope.²⁰

Yes. The facts of the case establish that Lana M. Lindsey and Carl R. Lindsey began a meretricious relationship in October 1974 and subsequently married in June 1976.²¹ Although they had no children during the marriage, each had a child from a previous marriage living with them. The parties separated in November 1981, after which respondent filed a petition for dissolution in December 1981 that was granted in March 1982.

Prior to the marriage, the parties logged the West Valley property, netting approximately $30,000, and built a barn/shop on the farm property. At the time of marriage, respondent possessed substantial separate property holdings including 30 acres of farm property with a mobile home, 30 acres of West Valley property, 11 acres of Arcadia property, 4 horses, and logging equipment and motor vehicles, while appellant had virtually no assets.

During the marriage the parties maintained a joint checking account and basically spent what they earned. Respondent worked for the family business Lindsey Brothers Excavating, Inc., earning a gross income of over $45,000 in 1980 and $28,500 in 1981, while appellant served as a homemaker caring for the children, horses, and farm and also worked a year for the company averaging $500 a month. The parties acquired and home bred horses. They began construction of a family home on the farm property in 1979 by borrowing money from respondent's mother ($20,000), the family business ($23,000), and a bank ($70,000). In June 1981 a fire destroyed the barn/shop on the farm property yielding insurance proceeds of $85,587.37.

At trial there was a dispute over the acquisition, characterization, and valuation of property prior to and during marriage along with contradictory evidence as to the amount of labor expended by the parties to improve property. The trial court applied the Creasman presumption to characterize respondent's property prior to marriage and during the meretricious relationship, finding the major assets to be either separate property of respondent or property acquired with separate funds or loans, and awarded all of the real property to respondent. Appellant principally received her personal effects, car insurance proceeds, four horses, a GMC pickup, and a cash award, with no account taken of any contribution she may have made to the construction of the barn/shop. The principal assets in dispute on appeal included respondent's separate real property, horses, and the fire insurance proceeds from the barn/shop that had been constructed prior to marriage on property owned by respondent. Appellant maintained she helped in framing, cementing, siding, and roofing the barn/shop and did almost all the painting, while respondent contended that he built the barn/shop himself and appellant did very little work. The court found the constricting dictates of the Creasman presumption to have made the law unpredictable and at times onerous.²² While the presumption may have been justifiable in the context of the Creasman case, it has been expanded far beyond its intended scope.²³ In this case the court was presented with an appropriate set of circumstances to abandon and overrule the Creasman presumption.²⁴

The Creasman presumption is abandoned in favor of examining the meretricious relationship and making a just and equitable disposition of the property.²⁵

Whether the trial court erred in applying the Creasman presumption to the barn/shop constructed before marriage and its subsequent insurance proceeds without evaluating appellant's contributions?²⁶

Under the just and equitable approach the trial court must consider whatever property interest a party may have in property such as the barn/shop.²⁷ The trial court's discretion is wide and will not be interfered with except for a manifest abuse of such discretion.²⁸ The fact that appellant's interest in the barn/shop was not evaluated rises to this level of error.²⁹

Yes. The trial court characterized the barn/shop and its subsequent proceeds as respondent's separate property because the barn was constructed prior to marriage.³⁰ The court relied on the Creasman presumption as the property upon which the barn/shop was built was in respondent's name.³¹ Hence no evaluation of appellant's premarriage interest in the barn/shop was made.³² Under the just and equitable approach the court holds the trial court must consider whatever property interest appellant may have in the barn/shop.³³

The fact that appellant's interest in the barn/shop was not evaluated rises to the level of manifest abuse of discretion.³⁴ The case is remanded to the trial court for a determination of what interest if any Lana Lindsey has in the barn/shop.³⁵ We find the remaining property to have been justly and equitably determined and distributed in accordance with the rule announced herein and with the statute.³⁶

The trial court erred in failing to evaluate appellant's contributions to the barn/shop under the new just and equitable standard, and the case is remanded for that determination.³⁷