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In re Marriage of Morton

Court of Appeals of Colorado, First Division

January 14, 2016

In re the Marriage of Cody M. Morton, Appellee, and Samantha Morton, n/k/a Samantha Lee, Appellant

          El Paso County District Court No. 12DR5368. Honorable Deborah J. Grohs, Judge.

         Cody M. Morton, Pro se.

         Ciccolella Family Law, P.C., John B. Ciccolella, Colorado Springs, Colorado, for Appellant.

         Opinion by JUDGE TAUBMAN. Berger, J., concurs. Hawthorne, J., concurs in part and dissents in part.

          OPINION

         TAUBMAN, JUDGE.

          [¶1] In this dissolution of marriage action, Samantha Morton, now known as Samantha Lee (wife), raises two principal issues on appeal relating to the trial court's consideration of her student loans obtained during the marriage. The first issue is whether the trial court erred in entering wife's loans as her " separate debt." The second issue is whether the trial court erred in considering wife's student loans as a financial resource in determining the amount of maintenance she was to receive. A third and related issue is whether the trial court erred in determining maintenance before it had concluded its allocation of marital property.

          [¶2] We agree with wife's contentions on these issues and, therefore, reverse the trial court's judgment and orders. We remand the case to the trial court to reconsider the permanent orders.

         I. Background

          [¶3] This case involves a marriage of approximately six years. During the marriage, Cody M. Morton (husband) was employed as a firefighter, while wife worked sporadically and also attended school to obtain training as a radiological technologist (RT). Three trial court orders are at issue here: (1) a final order, dated July 2, 2013; (2) an order concerning the decree of dissolution of marriage and partial final orders, dated August 8, 2013; and (3) an order regarding wife's second motion for posttrial relief dated October 16, 2013.

         II. Student Loans

          [¶4] In dividing marital and separate property, the court ordered that wife would be responsible for all of the student loan debt: $6449 as marital debt and $33,000 as wife's " separate debt." As to the separate debt, the court found that it was not " fair or equitable" for husband to be responsible for debt that wife " borrowed . . . after the parties separated, after the petition for dissolution was filed[,] and after temporary orders." Wife contends that the court abused its discretion by finding that all of the student loans incurred after the parties' separation were her separate debt. We agree.

          [¶5] An order classifying property as a marital asset or a separate asset presents a legal issue that is based on the court's factual findings. In re Marriage of Krejci, 2013 COA 6, ¶ 3, 297 P.3d 1035, 1037. We defer to the trial court's factual findings absent an abuse of discretion and independently review its resolution of legal questions. In re Marriage of Williamson, 205 P.3d 538, 540 (Colo.App. 2009).

          [¶6] A party's student loan obtained during marriage constitutes marital debt. In re Marriage of Speirs, 956 P.2d 622, 624 (Colo.App. 1997). Any debts incurred by a party during a predecree separation are likewise marital. In re Marriage of Burford, 26 P.3d 550, 560 (Colo.App. 2001).

          [¶7] It is undisputed that wife incurred all of her student loans during the marriage or during the parties' predecree separation. Thus, all of the student loans constitute marital debt. See id.; Speirs, 956 P.2d at 624. To the extent the trial court classified $33,000 as wife's " separate debt" solely because she obtained them during the parties' separation, it erred.

          [¶8] The student loans comprise approximately one third of the parties' overall marital estate. Because the error affects the parties' substantial rights, the order dividing the property must be reversed. See In re Marriage of Balanson, 25 P.3d 28, 36 (Colo. 2001) (holding errors by the court in dividing property are reversible when the aggregate effect of such errors affects the parties' substantial rights); see also In re Marriage of Zappanti, 80 P.3d 889, 893 (Colo.App. 2003) (holding an error affecting a large percentage of the marital estate requires remand to the district court to correct such error).

          [¶9] The determination that a student loan is marital debt, however, does not foreclose a trial court from allocating responsibility for payment of the loan entirely to the party who incurred it. See Speirs, 956 P.2d at 624. A court does not abuse its discretion in finding that a student loan should be solely the incurring party's responsibility because the party's degree was earned later in the marriage and will primarily benefit that party. See id. at 625; see also In re Marriage of Morehouse, 121 P.3d 264, 267 (Colo.App. 2005) (holding a court is under no obligation to divide marital debts equally).

          [¶10] Thus, in dividing the marital property on remand, the court should first include wife's total amount of student loans as a marital debt. It must then exercise its discretion to allocate that debt equitably as part of the overall property distribution. See Speirs, 956 P.2d at 624.

          [¶11] We reject wife's assertion that the total amount of student loans was $33,452.08, and that the court clearly erred by finding she obtained an additional $33,000 during the separation. The record reveals conflicting evidence as to the total amount of the student loans. For example, the record shows that wife obtained approximately $16,000 in loans between 2007 and 2008 for her RT program and took out a $6258 loan for the sonogram program she began in July 2012. Wife also testified that sonogram school would cost $32,000. Nevertheless, wife testified that her loans for both the RT and sonogram programs totaled only $33,452.

          [¶12] Further, wife's January and February 2013 financial affidavits show that her Stafford loans totaled $40,713.54, $25,000 of which was disbursed during the separation. However, Exhibit G shows that she incurred a total of $45,168 in Stafford and direct unsubsidized loans, with $17,000 in disbursements occurring during the parties' separation.

          [¶13] Where the evidence is unclear, we defer to the trial court's findings. See In re Marriage of Bowles, 916 P.2d 615, 617 (Colo.App. 1995). Thus, we may not disturb the trial court's finding that wife obtained $33,000 in student loans after the parties' separation. See id.; see also In re Marriage of Plesich, 881 P.2d 379, 381 (Colo.App. 1994) (reviewing court views evidence in the light most favorable to the court's order).

          [¶14] Because we are reversing the trial court's division of marital property and debts, on remand the court must consider the parties' economic circumstances at the time of the remand. See In re Marriage of Wells, 850 P.2d 694, 699 (Colo. 1993).

         III. ...


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