Sewall v. Saritvanich
726 A.2d 224, 1999 ME 46, 1999 Me. LEXIS 45 (1999)
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Rule of Law:
When non-marital property appreciates in value during a marriage due to contributions of marital funds or effort, that appreciation is presumed to be marital property. The burden is on the owner of the non-marital property to prove that the increase in value was due to the property's inherent value rather than the marital contributions.
Facts:
- Joseph Sewall purchased a property in Orono from his mother in December 1992, one year before his marriage, by signing a $100,000 demand note.
- Sewall and Pimonpan Saritvanich were married in December 1993.
- During the marriage, renovations were made to the Orono property, including improvements to two bathrooms, painting, wallpapering, and electrical work, costing between $3,000 and $4,000.
- Saritvanich testified that funds from a mortgage on her own separate property were used to improve the Orono property.
- At the time of the divorce, the Orono property was valued at $184,200, representing an increase of $84,200 from its purchase price.
- Sewall also purchased a property in Castine before the marriage using a home equity loan on another non-marital property, and made payments on that loan during the marriage.
- Sewall filed for divorce from Saritvanich in December 1995, after two years of marriage.
Procedural Posture:
- Joseph Sewall filed for divorce from Pimonpan Saritvanich in the District Court (Bangor), the trial court.
- The District Court entered a divorce judgment, which allocated the entire value of the Orono property to Sewall's non-marital estate.
- Saritvanich filed a motion for findings of fact and conclusions of law, which the District Court denied.
- Saritvanich, as appellant, appealed the judgment to the Superior Court (Penobscot County), an intermediate appellate court.
- The Superior Court affirmed the District Court's judgment.
- Saritvanich, as appellant, appealed to the Supreme Judicial Court of Maine, the state's highest court.
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Issue:
Does the increase in value of a non-marital property become marital property when renovations were made using marital funds during the marriage and the owner of the property fails to prove the appreciation resulted from the property's inherent value?
Opinions:
Majority - Dana, J.
Yes. The increase in value of a non-marital property is marital property when marital funds are used for improvements and the owner fails to prove the appreciation was passive. The court applied a burden-shifting framework. Saritvanich first met her burden by showing that the Orono property's value increased during the marriage and that marital funds were used for renovations. The burden then shifted to Sewall to demonstrate that the $84,200 increase in value was due to the property's inherent value, such as market forces, and not from the marital contributions. Sewall offered no evidence to meet this burden. Therefore, the statutory presumption that property acquired during the marriage is marital compels the conclusion that the entire appreciation of the Orono property is part of the marital estate, and the trial court's failure to allocate it as such was clear error.
Analysis:
This decision reinforces and clarifies the burden-shifting framework for classifying the appreciation of separate property in Maine divorce law. It establishes a strong presumption that any appreciation of separate property is marital if there is any contribution of marital funds or effort, no matter how small. This places a significant evidentiary burden on the spouse owning the separate property to prove the appreciation was passive and unrelated to marital contributions. Consequently, the ruling incentivizes spouses to maintain detailed financial records if they wish to protect the increased value of their non-marital assets during a marriage.
