In re Domestic Partnership of Walsh

In the Matter of the Domestic Partnership of: JEAN M. WALSH, Respondent/Cross Appellant, And KATHRYN L. REYNOLDS, Appellant/Cross Respondent.

No. 51125-8-II

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION II

June 25, 2019

UNPUBLISHED OPINION

GLASGOW, J. — Kathryn Reynolds appeals, and Jean Walsh cross-appeals, from a court ordered division of community-like property that occurred as a result of their domestic partnership dissolution. Reynolds argues that the trial court ignored our prior decision in Walsh v. Reynolds, 183 Wn. App. 830, 335 P.3d 984 (2014) (Walsh I) and misapplied the committed intimate relationship doctrine to the parties' relationship. Walsh argues that our prior decision was incorrect because its application would violate her constitutional rights and was also improper under Washington common law.

We hold that the trial court erred when it failed to follow the law of the case and when it declined to find a committed intimate relationship existed prior to 2005. The trial court also erred in conflating the issue of whether and when a committed intimate relationship existed with the issue of the proper characterization of the parties' property as separate or community-like, and there is no constitutional barrier to finding a committed intimate relationship prior to 2005.

We reverse and remand for a different trial judge to enter findings consistent with the law of the case and the committed intimate relationship doctrine as articulated in this opinion. The trial court must determine when, prior to 2005, the committed intimate relationship began in accordance with our prior decision. The trial court must apply the presumption that all property acquired during the committed intimate relationship is community-like. The court must then characterize the parties' property as either community-like or separate by applying that presumption and by considering whether the parties had an agreement to maintain separate property. The trial court must do so with the understanding that there is no constitutional barrier to applying the presumption to community-like property acquired during the committed intimate relationship. The trial court must then distribute the property accordingly.

FACTS

I. WALSH AND REYNOLDS'S RELATIONSHIP

In 1988, while working as an orthopedic surgeon in Fresno, California, Jean Walsh met Kathryn Reynolds. After they dated for about three months, Reynolds moved into Walsh's home. Reynolds did not pay any part of the mortgage or utilities, but she and Walsh agreed that Walsh would pay Reynolds to perform housekeeping. During the time that they lived together, Walsh also made contributions to Reynolds's separate retirement account. And although the two lived together, they maintained separate bank accounts and finances during the course of their 20 year relationship.

In 1989, Reynolds was laid off from work and returned to school at Fresno State University. Walsh paid Reynolds's tuition and other school expenses. In 1990, Walsh and Reynolds decided to have a child and, in 1992, Walsh gave birth to Julia.

After Julia was born, Walsh paid Reynolds additional money for providing daycare. In approximately January 1993, Reynolds moved out of Walsh's house but Walsh continued to payReynolds for household and daycare services. A few months later, Reynolds moved back into Walsh's house and in December 1993, Reynolds adopted Julia.

In 1996, Walsh gave birth to another child, Joe, whom Reynolds adopted in 1997. At some point prior to Joe's conception, the parties had stopped being physically intimate. In 1998, Reynolds gave birth to a third child, Emily, and Walsh adopted Emily in 2000. Walsh paid for all three adoptions.

When Walsh was pregnant with Joe in 1996, she sold her private medical practice and one share of a local health management company, and she used the proceeds and money from her personal savings to purchase property in Fresno. Walsh's income decreased significantly after she sold her practice, but she continued to pay Reynolds at the same rate as she had before. In addition to paying Reynolds, Walsh paid all expenses for the children, mortgage, utilities, as well as other household expenses.

When Reynolds paid for something for the children or the household, she would generally request and receive reimbursement from Walsh. For convenience, Walsh added Reynolds as an authorized user on two of her credit cards. However, throughout their relationship, Walsh and Reynolds otherwise maintained separate financial accounts and records. During their relationship, Walsh paid off a $7,500 credit card debt that Reynolds owed, which Reynolds repaid to Walsh through a $500 monthly deduction in Walsh's regular payments to Reynolds. Between 1990 and 2011, Walsh paid Reynolds over $500,000, which Reynolds reported as income.

On March 6, 2000, Walsh and Reynolds registered as domestic partners in California, which, like Washington, is a community property state. CAL. FAM. CODE § 760. At the time,though, California did not extend community property rights to domestic partners; the domestic partner statute instead addressed rights related to issues like healthcare. See Former CAL. FAM. CODE § 297 (1999); CAL. HEALTH & SAFETY CODE § 1261(a), § 1374.58.

In April, Walsh sold her house in Fresno, California and purchased a house in Tacoma, Washington, where she found employment as an orthopedic surgeon. After moving to Tacoma with Reynolds and the children, Walsh continued to pay for the mortgage, health and dental insurance, auto insurance, the children's private school tuition, and other household expenses. Walsh provided Reynolds with medical benefits by listing her as a domestic partner with Walsh's insurer. Walsh also continued to pay Reynolds for childcare and housekeeping. Walsh and Reynolds each titled one car in their own name and titled another car in both of their names.

In 2003, Walsh sold the house in Tacoma and used the proceeds to purchase a home in Federal Way, Washington. Walsh and Reynolds both signed the deed but Walsh took out a mortgage solely in her name. Reynolds did not make any financial contribution to the purchase or make any payment on the mortgage. Walsh paid for all utilities.

Also in 2003, California amended its domestic partner law to extend all rights available to married couples, including community property rights, to California's registered domestic partners, effective January 1, 2005. CAL. FAM. CODE § 297.5(a). The new law required notice to all California registered domestic partners about the change in the law. CAL. FAM. CODE § 299.3(a). Both Walsh and Reynolds denied ever receiving notice. Neither sought to change their domestic partner status in California.

In August 2009, Walsh and Reynolds registered as domestic partners in Washington. The parties separated seven months later on March 14, 2010. Walsh petitioned for dissolution on March 11, 2011.

II. FIRST TRIAL

The parties agreed on a parenting plan and child support for their children, then ages 19, 16, and 13. The issues remaining for trial were property distribution and attorney fees. The parties had amassed over $2 million in real property, retirement savings, and investment accounts. After a three-day trial, the trial court concluded that the parties lived in a committed intimate relationship¹ from January 1, 2005 to August 20, 2009 when they registered as domestic partners under Washington's Domestic Partnership Act, chapter 26.60 RCW.

The court found that Walsh and Reynolds cohabited from 1988 to 2010 and the purpose of their relationship was to create a family. While Walsh was the principal earner, they both contributed time and energy to raising their family, they jointly remodeled their Federal Way home, and they intended to live together as a family. The court chose January 1, 2005 because it was the effective date of California's amendment to its domestic partnership statute expanding legal protections related to property available to married couples to domestic partnerships. Walsh I, 183 Wn. App. at 852-53; CAL. FAM. CODE § 297.5(a). The trial court reasoned that picking any earlier date would retroactively alter the parties' property rights without due process of law. Walsh I, 183 Wn. App. at 852-53. The court also found that the couple intended to maintain separate assets and liabilities except for the Federal Way property and a van. The courtnoted in its oral ruling that if the parties had been a heterosexual couple and married in 2009, rather than registered as domestic partners, it "would not [have] hesitate[d] to find that a [committed intimate relationship] existed for the 20 plus years prior to the date of the marriage." Clerk's Papers (CP) at 412.

The trial court ordered the parties to sell the Federal Way house, allowed an offset of approximately $40,000 to Walsh for her contribution of an inheritance from her father, and divided the remaining proceeds 51.89 percent to Walsh and 48.11 percent to Reynolds. The trial court awarded no maintenance to Reynolds.

The trial court equally divided the remaining community-like property acquired between January 1, 2005 and March 14, 2010. The trial court also awarded Reynolds $35,117.50 in attorney fees and $2,400.75 in costs. Walsh appealed and Reynolds cross-appealed.

III. FIRST APPEAL

On appeal, we held in relevant part that the trial court correctly ruled Walsh and Reynolds had lived in a committed intimate relationship prior to registering as domestic partners in Washington in 2009, beginning at least as far back as the court's chosen date of January 1, 2005. But we expressly determined that the trial court "should have extended the application of the [committed intimate relationship] doctrine to the parties' relationship before 2005, including their registered domestic partnership under California's act [in 2000], an unimpeachable indicator of the intended nature of their relationship." Walsh I, 183 Wn. App. at 848. We also noted in a...