A new Colorado Court of Appeals decision is unusual in a couple of respects – it’s not often that a property division is reversed on appeal, and I don’t think I’ve ever seen an appeal in a case where the marital estate was worth so little (even though to the parties concerned it is everything they have) – since even with a grossly unequal property division, appeals cost money, and it is usually not worth the costs of an appeal for such a relatively small marital estate.
In Portell,1In re: Marriage of Portell (Colo.App. No. 21CA0380, Mar. 3, 2022) (Unpublished Decision). the trial court divided a marital estate worth just under $22,000, with the husband being allocated 98% of those assets – a grossly unequal property division by any measure. Additionally, even though there was testimony concerning an uncashed $2400 stimulus check which the husband had received from the IRS, the court failed to divide that asset.
Grossly Unequal Property Division is Inequitable
While it’s popular to assume that all marital assets and debts will be divided equally in a Colorado divorce, that’s not exactly what the statute provides. C.R.S. 14-10-113(1) requires the family law judge to divide the marital estate “in such proportions as the court deems just after considering all relevant factors.”
Property divisions in a divorce are usually pretty equal, but strictly speaking, equality is not required:
“A property division must be equitable, but not necessarily equal. An equitable division depends on the facts and circumstances of each case, and the key to an equitable distribution is fairness, not mathematical precision. The district court has great latitude to effect an equitable division of marital property, and we may not disturb the court’s decision absent a clear abuse of discretion. However, where the division is manifestly unfair, inequitable, and unconscionable, it must be set aside.”Portell.2In re: Marriage of Portell, ¶ 9 (Colo.App. No. 21CA0380, Mar. 3, 2022) (Unpublished Decision) (Cleaned Up).
While an “equitable” division usually means equal, there can be divorce cases where a judge divides the assets and debts unequally. But the court must make findings supporting such an outcome – and that’s especially true when the property division is grossly unequal.
In Portell, there was such a grossly unequal division, as the husband received 98% of the parties’ $21,832 of assets, with only a $2500 equalization payment to make up for what the trial court itself recognized was a “substantial imbalance” in his favor. The appellate court noted that “a facially disproportionate property division is not necessarily inequitable,” Portell,3In re: Marriage of Portell, ¶ 15 (Colo.App. No. 21CA0380, Mar. 3, 2022) (Unpublished Decision). and discussed cases where unequal divisions were equitable due to contributions of separate property, or one spouse needing the parties’ primary asset, a business, as her sole source of income.
But “[n]o such circumstances exist here to make the facially disproportionate division equitable.” Portell.4In re: Marriage of Portell, ¶ 17 (Colo.App. No. 21CA0380, Mar. 3, 2022) (Unpublished Decision). While the appellate court noted that there may have been valid reasons for a disproportionate division, in the absence of specific findings, it would not “fill in the blanks” and presume the grossly unequal division was equitable:
“Specific findings as to the value of each asset are not required if the basis for the court’s decision is apparent from its findings. However, a court’s findings must be sufficient to permit meaningful appellate review.
The magistrate’s findings are insufficient to allow us to determine why husband received the lion’s share of the marital estate. Therefore, we reverse the property division and remand for the court to reallocate the parties’ marital estate.”Portell.5In re: Marriage of Portell, ¶¶ 19-20 (Colo.App. No. 21CA0380, Mar. 3, 2022) (Unpublished Decision) (Cleaned Up).
Omitted Asset Means Improper Property Division
Quoting an earlier case, the court noted “if property is omitted from permanent orders without explanation, the property division cannot stand.” Portell.6In re: Marriage of Portell, ¶ 12 (Colo.App. No. 21CA0380, Mar. 3, 2022) (Unpublished Decision) (Cleaned Up).
Since the $2400 stimulus check was undeniably not divided by the family law judge, meaning the case was remanded so the trial judge could divide it equitably, as part of the overall equitable division of the marital estate.
There’s nothing particularly unique about the Portell case, except that for family law attorneys trying to argue what an equitable division at divorce means, we have one more data point – a grossly unequal property division with one spouse receiving 98% of the marital estate is too much of a disparity to be equitable without specific findings (and even then, would seen hard to support!)
For more information on dividing assets and debts in a divorce, see our article Division of the Marital Estate in the Colorado Family Law Guide.
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