                                                                        FILED 

                                                                    JANUARY 12,2016 

                                                                In the Office of the Clerk of Court 

                                                              W A State Court of Appeals, Division III 





          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON 

                             DIVISION THREE 


In the Matter of the Marriage of             )
                                             )         No. 32274-2-111
DAMIAN A. SCHWARZ,                           )
                                             )

                    Respondent,              )

                                             )

       v. 	                                  )         PUBLISHED OPINION
                                             )
SUSAN M. SCHWARZ, 	                          )
                                             )

                    Appellant.               )


       SIDDOWAY, C.J. -    Susan Champagne appeals the property distribution ordered

upon the dissolution of her marriage to Damian Schwarz.· She challenges the trial court's

characterization and distribution of several of her and Mr. Schwarz's retirement and other

investment accounts. The character of the accounts is complicated by the fact that both

parties entered their 13-year marriage with substantial separate assets, whose character

was arguably transformed by contributions, transfers, and reinvestment during the course

of the marriage.
No. 32274-2-111
In re Marriage o/Schwarz


       The appeal requires us to address several tracing issues and, most significantly, to

decide what constitutes clear and convincing evidence that investments that were

demonstrably separate property at their inception remained so, where the party arguing

their separate character offers less than exhaustive documentation of their status during

the course of the marriage. We hold that here, as in other cases, evidence can be clear

and convincing without being irrefutable.

       We affirm one of the trial court's challenged characterizations but, with the

advantage of a transcribed report of proceedings and issues that have been narrowed, we

conclude that the court abused its discretion in finding that Ms. Champagne failed to

overcome the community property presumption with respect to three others. We reverse

the characterization of the three assets and remand for the trial court to revisit its division

of assets with the corrected characterizations in mind.

                     FACTS AND PROCEDURAL BACKGROUND

       Damian Schwarz and Susan Champagne were married for 13 years before

separating and filing this dissolution action in 2012. Both had been married before, and

they entered the marriage with separate assets. Mr. Schwarz entered the marriage with a

house, an individual retirement account (IRA), and as the owner and operator of a small

business. Ms. Champagne entered the marriage with substantial investments acquired

through her own earnings and an inheritance from her mother.

       Both parties intended in this second marriage to keep their assets and finances

                                               2

No. 32274-2-III
In re Marriage ofSchwarz


separate. In response to questioning from Ms. Champagne's attorney, Mr. Schwarz

explained:

                 Q. Sir, are you aware of any community funds ever being deposited
          into [Ms. Champagne's] Bank of America account?
                 A. I have no idea what she did with her accounts.
                 Q. What she did with what?
                 A. Whatever account she had, I don't know what she had. I don't
          know what she did with that. That was our agreement that that-whatever
          is-that was her deal.

Report of Proceedings (RP) at 137 (emphasis added). When cross-examined, Ms.

Champagne agreed that the parties did not discuss their separate property:

                 Q. And you also testified that he never talked with you about his
          separate investments or assets; is that correct?
                 A. That's correct.

RP at 344.

          The way that the couple sought to accomplish a separation of their finances was

primarily by dividing household bills. While faithfully dividing household bills for 13

years, they evidently did not appreciate the value of retaining complete records or the

importance of scrupulously segregating their community earnings from their separate

assets.

          Shortly after marriage, Ms. Champagne closed the existing savings account she

maintained as "Susan Champagne," in which she held approximately $47,900, and

opened a new account. The parties now dispute whether this account and successor



                                               3

No. 32274-2-111
In re Marriage ofSchwarz


accounts were opened in both parties' names and were community accounts, or whether

the key accounts remained separate and were merely payable on death to Mr. Schwarz.

Ms. Champagne liquidated and transferred other premarital assets, including inherited

assets, into this and other accounts. While she presented documentary evidence that

could support the initially separate character of assets she consolidated in the early

2000's, Mr. Schwarz challenges the sufficiency of her initial documentation in a couple

of instances and her documentation of all of her assets thereafter. During the marriage,

both parties made contributions to preexisting lRAs; they now dispute in some instances

whether those contributions were made with community funds and, in other instances,

whether the trial court was presented with sufficient evidence from which to apportion

the accounts as part separate and part community.

       By the time of trial, the parties had resolved the relatively insignificant property

division issues arising out of their marriage; at issue were the major assets. The parties'

lawyers both exhibited a command of the 13 years' worth of financial evidence and

presented it efficiently-perhaps too efficiently, given the number of assets involved, for

any judge to track contemporaneously. At the conclusion of the trial, the court asked the

lawyers to submit their closing arguments in writing and to focus on tracking separate

assets, explaining to their clients that while he had done "hundreds of these cases," their

dissolution was "one of the most complex tracing cases 1 think I've ever had." RP at 378.




                                              4

No. 32274-2-III
In re Marriage ofSchwarz


       Mr. Schwarz claimed to have demonstrated the separate character of $404,693 in

separate assets, principal among them being his separate business, most of the value of

his retirement accounts, and his home, in which the parties lived until separating in June

2012. The court found the entire $404,693 in value of assets to be Mr. Schwarz's

separate assets.

       Ms. Champagne claims to have demonstrated the separate character of $184,198

in separate assets, principal among them being bank and investment accounts held in her

individual name. The court found only $48,928 in value of these assets to be Ms.

Champagne's separate assets.

       The court characterized $292,403 of the parties' assets as community property and,

distributed $184,450.51 ofthose assets to Ms. Champagne and $107,952.50 to Mr.

Schwarz. In order to give effect to the equal division of community assets, the court

ordered Ms. Champagne to make an equalization payment of $38,249 to Mr. Schwarz.

       Findings and conclusions were presented and entered based on the memorandum

decision. A motion for reconsideration filed by Ms. Champagne was denied. Ms.

Champagne appeals.

                                       ANALYSIS

       Ms. Champagne has assigned error to the trial court's findings and conclusions

dealing with only four assets:




                                             5

No. 32274-2-III
In re Marriage ofSchwarz


       •	      The characterization of an IRA held in Mr. Schwarz's name at
            Charles Schwab, whose value at the time of dissolution was found to
            be $185,271; the court treated $159,189 in value of the property as Mr.
            Schwarz's separate property and the $26,082 balance as community
            property;

       •	       The characterization of an IRA held in Ms. Champagne's former
            married name at Western National Life, whose value at the time of
            dissolution was found to be $15,869; the court held that Ms.
            Champagne had failed to overcome the presumption that it was
            community property;

       •	       The characterization of an IRA held in Ms. Champagne's former
            married name at Bank of America, whose value at the time of
            dissolution was found to be $4,401; the court again held that Ms.
            Champagne had failed to overcome the presumption that it was
            community property; and

       •	       The characterization of an investment account in Ms. Champagne's
            former married name at D.A. Davidson, whose value at the time of
            dissolution was found to be $115,000; the court treated the assets in the
            account as hopelessly commingled and thereby community property.

       Ms. Champagne also assigns error to the court's order that she make a $38,249

equalization payment, contending both that it was based on an erroneous characterization

of the foregoing assets and that it was not just and equitable. She also contends that the

trial court abused its discretion in denying her motion for reconsideration.

       After outlining the applicable law, we first address the challenged characterization

of Mr. Schwarz's IRA. We then summarize Ms. Champagne's evidence offered to trace

nine originally separate assets to assets held at the end of the marriage, before turning to




                                              6

No. 32274-2-III
In re Marriage ofSchwarz


the three remaining assets whose characterization she challenges, the equalization

payment, and the motion for reconsideration.

                                  I. APPLICABLE LAW

       In a dissolution action, all property, both community and separate, is before the

court for distribution. Friedlander v. Friedlander, 80 Wn.2d 293,305,494 P.2d 208

(1972). An asset is separate property if "acquired before marriage; acquired during

marriage by gift or inheritance; acquired during marriage with the traceable proceeds of

separate property; or, in the case of earnings or accumulations, acquired during

permanent separation." In re Marriage o/White, 105 Wn. App. 545, 550,20 P.3d 481

(2001) (footnotes omitted); RCW 26.16.010.

      The character of property, whether separate or community, is determined at the

time of acquisition. In re Marriage ofPearson-Maines, 70 Wn. App. 860, 865, 855 P.2d

1210 (1993). Property acquired during marriage is presumptively community property.

A party may rebut this presumption by offering clear and convincing evidence that the

property was acquired with separate funds. In re Marriage o/Skarbek, 100 Wn. App.

444,449, 997 P.2d 447 (2000). "The requirement of clear and satisfactory evidence l is


       I"[V]arious phrasings" of the standard for overcoming the presumptions applied
in community property disputes have been used in Washington cases over the years, as
our Supreme Court acknowledged in In re Estate ofBorghi, 167 Wn.2d 480,484 nA, 219
P.3d 932 (2009). The court took the opportunity in Borghi to "make clear that, once a
presumption in favor of either community or separate property is established, the burden
to overcome the presumption is by clear and convincing evidence." Id.

                                             7

No. 32274-2-111
In re Marriage ofSchwarz


not met by the mere self-serving declaration of the spouse claiming the property in

question that he acquired it from separate funds and a showing that separate funds were

available for that purpose." Berol v. Berol, 37 Wn.2d 380,382,223 P.2d 1055 (1950).

"Separate funds used for such a purpose should be traced with some degree of

particularity." Id.

       A presumption that an asset possessed by a married person is community property

may arise even though the particular time of acquisition has not been established. Harry

M. Cross, The Community Property Law in Washington (Revised 1985),61 WASH. L.

REv. 13, 29 ( 1986) (citing State ex ref. Marshall v. Superior Court, 119 Wash. 631, 206

P. 362 (1922)). Property in the possession of a married person is presumed to be

community property'" until the contrary is shown;'" this presumption "is not a very

strong presumption and is one that may be easily overcome." Marshall, 119 Wash. at

637 (quoting 5 RULING CASE LAW Community Property § 26, at 844 (1914)). Although

this presumption will always yield to a preponderance of the evidence, the duration of the

marriage may affect whether the trial court should apply it at all. "As a general rule, the

longer the duration of the marriage the more likely the court will assume that assets in the

possession of the spouses are community." 19 KENNETH W. WEBER, WASHINGTON

PRACTICE: FAMILY AND COMMUNITY PROPERTY LAW § lOA at 137 (1997).

       "Once the separate character of property is established, a presumption arises that it

remained separate property in the absence of sufficient evidence to show an intent to

                                             8

No. 32274-2-111
In re Marriage ofSchwarz


transmute the property from separate to community property." In re Estate ofBorghi,

167 Wn.2d 480, 484,219 P.3d 932 (2009). It will retain that character as long as it can

be traced or identified. Pearson-Maines, 70 Wn. App. at 865 (citing Baker v. Baker, 80

Wn.2d 736, 745,498 P.2d 315 (1972)).

       "ComminglingH of separate and community funds may give rise to a presumption

that all are community property. This is not commingling in the ordinary sense,

however2~ it must be hopeless commingling. Unlike the foregoing presumptions, this one

is conclusive, arising only after the effort at tracing proves impossible. 3 It is "[0]nly if

community and separate funds are so commingled that they may not be distinguished or

apportioned is the entire amount rendered community property." Pearson-Maines, 70

Wn. App. at 866 (citing In re Estate ofAllen, 54 Wn.2d 616, 622, 343 P.2d 867 (1959)).




       2 "Commingle" is defined as:
       to mingle or mix together ... 1 : to mix together ... 2 : to combine (the
       funds or property of several individuals) into a common fund or stock (as
       for convenience of investment by a trust company) syn see MIX

WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 457 (1993).
       3 Rather than an evidentiary rule, this presumption is a provision of substantive
law. See In re Green's Estate, 46 Wn.2d 637, 642, 283 P.2d 989 (1955) ("The so-called
'conclusive presumption' is ... a provision of substantive lawH). In In re Witte's Estate,
for instance, our Supreme Court did not speak of a presumption but explained instead:
"Where separate funds have been so commingled with community funds that it is no
longer possible to distinguish or apportion them, all of the commingled fund, or the
property acquired thereby, is community property." 21 Wn.2d 112, 125, 150 P.2d 595
(1944) (emphasis added).

                                               9

No. 32274-2-III
In re Marriage ofSchwarz


"If the sources of the deposits can be traced and identified, the separate identity of the

funds is preserved." Skarbek, 100 Wn. App. at 448.

       Commingling in this hopeless sense is illustrated by Witte's Estate and In re

Marriage ofShui v. Rose, 132 Wn. App. 568, 125 P.3d 180 (2005). In Witte's Estate,

farm income was found to have been commingled where, for much of a 44-year marriage,

it was part separate (from the separate character of the farm ground) and part community

(from community effort) and

       there was never any segregation as between the two items, and ... the
       entire amount was continuously devoted as a whole to the acquisition of
       other lands which were treated in the same manner, and ... it is now
       impossible to disentangle, separate, or apportion the component parts of the
       mass.

21 Wn.2d at 128.

       In Shui v. Rose, stock options were exercised by the husband, the shares thus

acquired were sold, and the proceeds were deposited to a single account. The options had

different inherent values at the time of exercise and "some ... had a mixed character,

some were entirely community property, and some were entirely separate property." 132

Wn. App. at 583. The single account was later divided into four investment accounts,

with the division being unrelated to the character of the original options. The court

concluded that "the funds in the investment accounts simply are not traceable to the

options that yielded them." Id. at 585.




                                             10 

No. 32274-2-111
In re Marriage ofSchwarz


       A trial court is not bound to award property to the individual or the community

based on the property's classification but "the court must have in mind the correct

character and status of the property as community or separate before any theory of

division is ordered." Blood v. Blood, 69 Wn.2d 680, 682, 419 P .2d 1006 (1966) (citing

Shaffer v. Shaffer, 43 Wn.2d 629,262 P.2d 763 (1953)).

       A trial court's characterization of property as separate or community presents a

mixed question of law and fact. In re Marriage ofKite and Kendall, 186 Wn. App. 864,

876,347 P.3d 894 (2015) (citing In re Marriage ofMartin, 32 Wn. App. 92, 94, 645 P.2d

1148 (1982)). "'The time of acquisition, the method of acquisition, and the intent of the

donor, for example, are questions for the trier of fact.'" Id. (quoting Martin, 32 Wn.

App. at 94). Accordingly, whether or not a rebuttable presumption of community or

separate character is overcome is a question of fact. See id. at 881 (reviewing whether

substantial evidence supports overcoming the presumption); In re Marriage ofMix, 14

Cal.3d 604, 612, 536 P.2d 479, 122 Cal. Rptr. 79 (1975). We review the factual findings

supporting the trial court's characterization for substantial evidence. Kite, 186 Wn. App.

at 876 (citing In re Marriage ofMueller, 140 Wn. App. 498, 504, 167 P.3d 568 (2007)).

The ultimate characterization of the property as community or separate is a question of

law that we review de novo. Id.

       If a trial court mischaracterizes property, we will remand the matter for further

consideration when "(1) the trial court's reasoning indicates that its division was

                                             11 

No. 32274-2-III
In re Marriage o/Schwarz


significantly influenced by its characterization of the property, and (2) it is not clear that

had the court properly characterized the property, it would have divided it in the same

way." In re Marriage o/Shannon, 55 Wn. App. 137, 142, 777 P.2d 8 (1989).

                      II. MR. SCHWARZ'S CHARLES SCHWAB IRA

       Mr. Schwarz's evidence on the character of his Charles Schwab IRA account

number []5129 consisted of two account statements (April 2003 and January 2007), tax

documentation of his contributions to the account in 2006, 2007, 2010, and 2011, and his

testimony that the account was established before the parties' marriage in 1999 and there

had been only the four documented post-marriage contributions. He testified that the

April 2003 statement "was the last statement I could get from Charles Schwab." RP at



       Mr. Schwarz admitted that contributions to the account between 2006 and 2011

were made with community funds. He therefore offered the testimony of a certified

public accountant, Todd Carlson, who had reviewed IRS tax statements for 2006,2007,

2010, and 2011 that reported the amounts of the annual contributions and the year-end

values of the account. Based on the year-to-year percentage of the account comprising

community funds and year-to-year growth, Mr. Carlson expressed the opinion that at



       4When testifying, Mr. Schwarz mistakenly referred to the earliest statement as the
March 2003 statement. The earliest statement in Ex. P-19, about which he was testifYing,
is the monthly statement for April 2003.

                                              12 

Ji
i!:
)
Jj




i
II 
 
   No. 32274-2-III
         In re Marriage ofSchwarz


!        year-end 2011 and thereafter, 85.9 percent of the account represented the value of
I

I
       separate contributions and 14.1 percent represented the value of community

!
       contributions. On that basis, $159,189 of the stipulated trial value of the account

         ($185,271.44) represented the present value of Mr. Schwarz's separate contributions and

         $26,082 represented the present value of community contributions. The trial court

         accepted Mr. Schwarz's evidence and Mr. Carlson's analysis and characterized

         $159,189.44 in value of the IRA as Mr. Schwarz's separate property.

                Ms. Champagne argues that the trial court erred in treating Mr. Schwarz's

         evidence as sufficient. The earliest documentation of the IRA that Mr. Carlson had

         reviewed was the 2006 IRS tax form, and he was asked to assume that before 2006 the

         entire account was Mr, Schwarz's separate property and that the only community

         contributions occurred in 2006, 2007, 2010, and 2011. Ms. Champagne argues that only

         Mr, Schwarz's self-serving testimony supports his position that the Charles Schwab IRA

         existed before the marriage and that no other community contributions were made,

         Citing Berol, she argues that his   ~~mere   self-serving declaration" is insufficient. Br. of

         Appellant at 26 (quoting Berol, 37 Wn.2d at 382).

                Applying the analysis required by case law, the evidence established that Mr,

         Schwarz possessed the assets in the Charles Schwab IRA in and before April 2003 but




                                                          13 

No. 32274-2-111
In re Marriage ofSchwarz


there was no evidence that he acquired those assets during the marriage. 5 At most, then,

the weak presumption that property possessed during marriage is community property

applies to the IRA assets before community contributions were made beginning in 2006.

Berol, which dealt with property shown to have been acquired during the marriage, does

not apply. Because Mr. Schwarz entered the parties' marriage less than four years before

the April 2003 date of the earliest Charles Schwab IRA statement admitted as evidence

and he was in his mid-40s at the time, the presumption is particularly weak.

       Mr. Schwarz's testimony that the Charles Schwab IRA existed before marriage is

sufficient evidence of its initially separate character. Mr. Carlson's testimony provided a

sufficient basis for apportioning its value at dissolution into community and separate

shares. The trial court did not err in its characterization of the asset.

            III. MS. CHAMPAGNE'S ALLEGEDLY SEPARATE ASSETS

       The overarching issue presented by Ms. Champagne's challenge to the

characterization of the remaining three assets-assets that the court characterized as

community property and that Ms. Champagne claims are entirely or predominantly her

separate property-is how exhaustive a party's tracing of her separate assets must be.



       5 While Ms. Champagne did not concede that the Charles Schwab IRA predated
the marriage, she testified she was aware of the four contributions for which tax records
were offered, explaining that the parties had historically made IRA contributions at tax
time, in order to reduce their federal income tax liability. As Mr. Schwarz points out,
Ms. Champagne had the ability to acquire copies of all of the parties' joint tax returns.

                                               14 

I
 ,
~
~
i

     No. 32274-2-111

II
j
     In re Marriage ofSchwarz


i!   Ms. Champagne testified and in almost all cases presented supporting documentary
I
!    evidence that she had over $195,000 in value in separate, liquid, assets at the time of the
I
I    parties'marriage. She testified that her separate assets were maintained during the 13
I    years of the marriage either in her individual stock accounts or individual savings-type

     accounts that-while sometimes linked with checking accounts into which her paychecks

     were deposited-were nonetheless separate from admittedly community property

     checking accounts. She moved her assets between banks and brokerage firms and at trial

     she testified to the transitions from one account to another, providing documentation of

     these transitions. What she did not do is provide an exhaustive 13-year tracing of every

     account.

            We conclude that Ms. Champagne's evidence was largely sufficient to overcome

     the community property presumption and that the trial court abused its discretion in

     finding otherwise. We begin by recapping the nine separate assets that predated the

     parties' marriage and Ms. Champagne's evidence in support of their separate character.

     Because the extent and quality of her supporting evidence is at issue, we cite heavily to

     the evidence. For ease of reading, we do so by footnote from this point on.

            $49,719.35 in savings at Washington Mutual Bank. Ms. Champagne presented a

     monthly statement (September 1999) for an indexed money market account number




                                                  15 

No. 32274-2-1I1
In re Marriage ofSchwarz


[]3690 maintained in her individual name with Washington Mutual Bank. 6 (Like the

parties and the court, we often refer to Washington Mutual Bank hereafter as "WaMu,"

its trade name.) The statement shows a premarital account balance of$49,719.35 on

August 26, 1999. 7 She presented an October 1999 statement showing a name change to

the WaMu account, to her married name. 8 That October statement and another October

statement for a new WaMu savings account number (]7792, document a transfer of all

funds in account number []3690 to account number []7792. 9

      Ms. Champagne testified that during the parties' marriage, her earnings were not

deposited to her savings-type or stock brokerage accounts, but were deposited instead to

distinguishable checking accounts. She presented a monthly statement (October 1999)

for her WaMu "Free Checking" account number []8994, that reveals payroll deposits

from her employer and substantial check writing activity. to

      Ms. Champagne testified that in June 2002 she opened new accounts at WaMu

that she referred to as her "platinum account," her "checking account," her "statement

savings account," and later, to obtain better interest, her "money market savings




      6   Ex. R-120, at 1.
      7   Id.
      8   Ex. R-120, at 2.
      9   Ex. R-120, at 3.
       to   Ex. R-122.

                                            16 

No. 32274-2-III
In re Marriage ofSchwarz


account." I I WaMu statements admitted into evidence document the closing of her

savings account number []7792 and the transfer of the $62,316.58 balance in that account

to her new Platinum Account number []7113. 12 Among the exhibits at trial were

statements for the new accounts titled "YOUR COMBINED STATEMENT OF

ACCOUNTS," that identified her accounts as follows:

      Product Name                             Account Number

      Free Checking                            []8994
      Platinum Checking                        []7113
      Statement Savings                        [] 1343
      Money Market Savings                     []5960 13

       Ms. Champagne testified to some large transfers between her Platinum Account

and a preexisting D.A. Davidson account number []6087 between August 2000 and

February 2001. She testified that in or about August 2000, she met with her broker at

D.A. Davidson, who recommended she sell certain investments and purchase others.14

She explained that based on his recommendations, she transferred $56,000 from her

WaMu savings to D.A. Davidson to make the recommended purchases with the

understanding that other stocks would be sold "in a few months," after which anticipated




      II   RP at 247,249,252. 

      12   Ex. R-120, at 13-14. 

      13   E.g., Ex. R-115, at 1 (Aug. 2008), 5 (Sept. 2008). 

       14 RP at 363, 239-40. 


                                              17
I
I
•   No. 32274-2-III
    In re Marriage ofSchwarz


    proceeds of some $10,000 and $16,000 would "go back into my savings account to

    replenish a portion of the $56,000 that I took OUt."15

           Ms. Champagne supported her testimony with a copy of her September 2000

    statement for her WaMu account showing a $56,000 telephone transfer on August 22 and

    her August 2000 D.A. Davidson statement showing the purchase of$55,582 in new

    investment positions on August 21 and the $56,000 deposit on August 23. 16 She also

    provided copies of her January 2001 and February 2001 D.A. Davidson statements

    showing withdrawals of$10,000 and $16,369.47, respectively, that she testified were

    deposited to her WaMu savings account. 17 She did not provide statements showing the

    deposit of the $10,000 and $16,349.47 back into her savings account, explaining when

    cross-examined that "I do not have the specific account statement that shows the actual

    deposits," but that "I produced account statements that, during the period of time, the

    account statements increased in that value."18 In this connection, the evidence includes

    her November 2000 WaMu savings statement showing an ending balance of almost

    $30,000 and a June 2002 statement showing an opening balance of $62,253. 19




           15 RP at 363-64.
           16 Ex. R-120, at 8; Ex. R-121, at 9.
           17 Ex. R-120, at 10-11.
           18RP at 341.
           19Ex. R-120, at 9, 13.

                                                  18 

No. 32274-2-III
In re Marriage ofSchwarz


       Ms. Champagne testified that upon WaMu's demise in September 2008 she closed

all of her accounts with that bank and opened new accounts with Bank of America. 20 She

supported her testimony with the September 2008 monthly statements for both the WaMu

and Bank of America accounts, reflecting the contemporaneous delivery and receipt of

identical balances. 21

       It was undisputed at trial that Ms. Champagne's Bank of America accounts were

still open, and were claimed by her as separate assets. The trial court concluded that Ms.

Champagne had "successfully traced by clear and convincing evidence that these

accounts were and are comprised of funds that were [Ms. Champagne's] separate

property prior to marriage and have not otherwise been co[m]mingled."22

       $45,181 in value in A. G. Edwards & Sons account. Ms. Champagne testified that

before the parties' marriage, she maintained a substantial investment account at A.G.

Edwards & Sons. 23 She supported her testimony with a premarital quarterly statement

(April-June 1999) for an account number [] 1014 maintained in her individual name with

A.G. Edwards. 24 The statement shows the account held $509.90 in cash and four mutual




       20 RP at 255. 

       21 Ex. R-115, at 5-14. 

       22 Clerk's Papers (CP) at 101. 

       23 RP at 299. 

       24 Ex. R-121, at 1-2. 


                                            19 

No. 32274-2-III
In re Marriage 0/ Schwarz


funds with a quarter-end value of $44,670.69. 25 It also shows the account was set up for

automatic reinvestment of dividends paid by the mutual funds. Ms. Champagne testified

that she closed the account shortly after the parties' marriage and transferred the mutual

funds to D.A. Davidson account number []6087, which she opened at that time. She

supported her testimony with the March 2000 statement for the D.A. Davidson account,

which reveals $502.97 in cash, positions in the same four mutual funds formerly held at

A.G. Edwards, and that the new account was also set up for reinvestment of dividends

from the mutual funds. 26 The number of shares in each mutual fund in the D.A.

Davidson account had increased slightly from the number of shares held at A.G. Edwards

eight months earlier, in varying amounts-from a negligible increase to an increase of

approximately 12 percent. It was undisputed at trial that Ms. Champagne's D.A.

Davidson account number []6087 was still open, and was claimed by her as a separate

asset.

         $39,192.10 inheritance/rom mother's estate. Ms. Champagne testified that she

inherited several assets from her mother, who died before the parties' marriage. She

testified that one was a distribution of cash she received in December 1999. 27 She

supported her testimony with an undated statement of "Individual Balances" that she


         25Id.
         26   Ex. R-121, at 4-6. 

         27   RP at 225-26. 


                                            20
No. 32274-2-III
In re Marriage ofSchwarz


explained was prepared by her sister, the executor of her mother's estate. 28 The statement

included a calculation of the net amount due each of five individuals (herself and her

siblings, according to Ms. Champagne), showing each child's beginning share of cash

("average value") of $40,217.65 and adjustments for the value of "Household Items" and

any "advance" that each had evidently received. 29 "Sue's Balance" was identified as

$39,192.10. She also presented the January 2000 statement for her WaMu savings

account []7792 showing a "Customer Deposit" of$39,112.10 on December 29,1999,

next to which was her handwritten notation, "M & D house & estate."30 She testified that

she made the notation at the time she received the monthly statement. 3) As earlier

addressed, funds from WaMu account number []7792 were transferred to WaMu account

number []7113 and from there, were transferred to her Bank of America account.

      $15,000 loan to Damian Schwarz' repaid with Charles Schwab investments. Ms.

Champagne testified that before the parties were married, Mr. Schwarz had borrowed

$15,000 from her that he repaid in May 2004 by transferring assets from his own account

with Charles Schwab into her name. 32 She supported her testimony with a May 2004


      28 RP at 336; Ex. R-120, at 4.
      29Id.
      30 Ex. R-120, at 5. 

      3) RP at 219-20; Ex. R-120, at 5. 

      32 RP at 309-10. 




                                            21 

No. 32274-2-111
In re Marriage ofSchwarz


statement for a Charles Schwab account number []9712 in her name that reflected the

joumaling into the account of 17 stock and mutual fund positions on May 28,2004. 33

The month-end value of the account was $15,591.84. 34 Mr. Schwarz admitted at trial that

the investments in the Charles Schwab account totaling $15,591.84 were originally his

and that he transferred the investments to Ms. Champagne's name in 2004. 35 When

cross-examined about the loan Mr. Schwarz did not deny that he borrowed the money but

claimed not to remember the circumstances, testifying "1 could have," and "Not like it's

not true, but I don't recall."36

       Ms. Champagne testified that assets in the Charles Schwab account were

transferred into her D.A. Davidson account number [J6087 in May 2012. She supported

her testimony with the May 2012 statement for her D.A. Davidson account showing

receipt into the account on May 9, 2012, of seven securities positions and debit and credit

balances characterized as NSCC 37 transfers or receipts "from deliv firm."38 She also

produced a copy of the March 2012 statement for her Charles Schwab account number

[]9712 showing exactly the same seven stock positions that were received into the D.A.


       33 Ex. R-121, at 12. 

       34 Ex. R-121, at 11. 

       35 RP at 138. 

       36 RP at 137-38. 

       37 National Securities Clearing Corporation. 

       38 Ex. R-121, at 321-33. 


                                            22 

No. 32274~2-II1
In re Marriage ofSchwarz


Davidson account some five weeks later. 39 The cash balance in her Charles Schwab

deposit account at the end of March had been $1,779.88 and the credit balance received

at D.A. Davidson five weeks later was $1,819.90. 40

       $10,902 in value ofCab letron stock. Before the parties' marriage, Ms.

Champagne worked for Cabletron. She testified that one employee benefit was

participation in an employee stock purchase plan through which she acquired 736 shares

of Cab letron stoCk. 41 Her testimony was supported by documentation that as of June

1999, three months before the parties' marriage, she owned 736 shares of Cab letron

stock.42 Her October 1999 statement for the plan showed that the 736 shares had a

market value at that time of$10,902.37. 43

       Ms. Champagne testified that in the summer of2000 she sold 482 shares of her

Cabletron stock through E-Trade. 44 Her testimony was supported by trade confirmations

and a monthly statement for her E-Trade account number []0005, in her name, showing

that 482 shares were sold in transactions taking place on June 28 and July 6. 45 She



       39   Compare Ex. R-121, at 25-27, with Ex. R-121, at 30-33. 

       40   Compare Ex. R-121, at 24, with Ex. R-121, at 32. 

       41 RP at 292-93. 

       42 Ex. R-116, at 1. 

      43Id.
       44 RP at 294~95. 

       45 Ex. R-116, at 2-4. 


                                             23 

No. 32274-2-111
In re Marriage ofSchwarz


explained that the proceeds from the sale were kept in her E-Trade account until March

200 I when she used the proceeds to purchase 500 shares of Cisco stock. 46 She presented

a March 2001 statement for her E-Trade account number []0005 showing the purchase on

March 30 of 500 Cisco shares. 47

      Ms. Champagne testified she eventually transferred the assets held in her E-Trade

account to the Charles Schwab account that had been established in 2004, when Mr.

Schwarz repaid the previously described $15,000 loan. While she supported her

testimony with account transfer documentation showing the transfer of 500 Cisco shares

into her Charles Schwab account number []9712, the account number for the transferred

E-Trade account-[] 1059--differed from the account number on E-Trade statements for

earlier periods. 48 No explanation was offered. As earlier recounted, the assets in Ms.

Champagne's Charles Schwab account number []9712 were all transferred in May 2012

into an account number []6087 that she maintained with D.A. Davidson.

      $8,136.77 cash value ofNew York Life whole life policy. Ms. Champagne

presented a January 20, 2000 "Explanation of Benefits ... in Full Settlement of All

Claims Under Policy Number []861 [,] Insured Susan Marie Champagne."49 It was dated



      46 RP at 295. 

      47 Ex. R-116, at 5-8. 

      48 Compare Ex. R-121, at 15, 17, with Ex. R-116, at 2-8 

      49 Ex. R-120, at 6 (some capitalization omitted); RP at 226-27. 


                                            24 

I

I    No. 32274-2-111


I
     In re Marriage ofSchwarz

I
     January 20, 2000, and indicated an "Amount Payable" in settlement of the cash value of

     the policy of $8, 136.77. 50 Ms. Champagne testified that the whole life policy dated back

     to her prior marriage. 51 She testified that the proceeds from cashing out the policy were

     deposited to her WaMu savings account. 52 Her testimony was supported by her February

     monthly statement for her savings account number []7792 showing the deposit of

     $8,136.77 on February 22.53

            $8,073.96 in value ofIDS bondfunds. Ms. Champagne testified that she inherited

     two IDS (income deposit security) bond funds from her mother's estate that were

     distributed to her in 1998 with values of$2,328.48 and $3,783.04, respectively.54 She

     offered, and the trial court admitted, an exhibit R-131 that is not in our record on appeal.

     According to testimony that was not challenged, the exhibit included March 1998

     statements for IDS stock and bond funds, in Ms. Champagne's name, having the values

     to which she testified. 55 Ms. Champagne also presented the July 2000 statement for her

     WaMu checking account number []8994, showing a deposit on July 5 of $8,073.96, that




            50Id.
            51 RP at 226-27. 

            52 RP at 227-28. 

            53 Ex. R-120, at 7. 

            54 RP at 236-37. 

            55 RP at 236-37 (citing Ex. R-131, at 3-4). 


                                                  25 

No. 32274-2-111
In re Marriage ofSchwarz


she testified represented the proceeds of her sales of both IDS funds. 56 She claimed the

funds had increased in value over the prior two-plus years. 57 According to the testimony,

the exhibit also reflects a transfer from the checking account to her savings account the

next day, but in the amount of $10,000 rather than $8,073.96. 58 Ms. Champagne testified

that her transfer of the $10,000 included the proceeds of her sale of the IDS funds. She

admitted that the balance of approximately $1,900 came from her earnings and was

community property. 59

       $6,399 in value ofmutualfunds at WM Financial Services. Ms. Champagne

testified that before the parties' marriage, she had received a distribution of a mutual fund

from her mother's estate that she held at WM Financial Services. 60 She supported her

testimony with a March 1999 account statement for account number []9513 in her

individual name, showing holdings of 107.441 shares of Fidelity Contrafund with a

month-end value of $6,399.18. 61 She testified that she rolled the fund into her D.A.

Davidson account number []6087. 62 She supported that testimony with the March 2000



       56   RP at 234-35 (citing Ex. R-131, at 2). 

       57   RP at 238. 

       58   RP at 235-36. 

       59   RP at 338. 

       60   RP at 306. 

       61   Ex. R-121, at 3. 

       62   RP at 307-08. 


                                               26 

No. 32274-2-III
In re Marriage ofSchwarz


statement for the D.A. Davidson account, showing 129.167 shares of Fidelity Contrafund

held in the account as ofmonth-end. 63 She explained that the difference in the number of

shares was because she had elected dividend reinvestment and that the "107.441 shares

on March 31, '99 [were] all reflected in the Contra fund, 129.157 shares in March of

2000."64 Her testimony that she had elected dividend reinvestment was supported by the

March 2000 D.A. Davidson statement, which revealed that 3.1550 shares of the fund had

been received in an NSCC transfer on March 22, implying that a dividend reinvestment

of 3.1550 shares had been received at, and transferred by, the firm in which the shares

were formerly held. 65

       $5,770 in value ofIRA assets at WaMu. Ms. Champagne testified that before the

parties' marriage she had contributed to an IRA that she held at WaMu. 66 She supported

her testimony with account statements demonstrating that at the time of her marriage to

Mr. Schwarz, she had an IRA maintained at WaMu with a date of marriage value of

approximately $5,770. 67 She offered statements showing that on April 8, 2008, she

closed the IRA and used funds to purchase an annuity, Policy No. []4692, that she held in




       63 Ex. R-121, at 5. 

       64 RP at 308. 

       65 Ex. R-121, at 6. 

       66 RP at 266. 

       67 Ex. R-119, at 2. 


                                            27
No. 32274-2-111
In re Mar.riage ofSchwarz


an IRA at AIG (Annuity Insurance Company).68 She offered an account statement

showing that as of April 2010, she held her "Policy No. []4692[,] Issue Date: 4/08/2008"

in an IRA at Western National Life Insurance Company, which she testified was the

result of a name change. 69 She presented statements showing that, at the time of trial, the

annuity policy in her Western National IRA had a value of $15,869. Mr. Schwarz has

never disputed that the origin of the Western National IRA was the separate property

WaMu IRA.70

       Mr. Schwarz disputes the character of contributions that Ms. Champagne made to

the IRA in April 2005 and April 2007. Ms. Champagne testified she did not have enough

money in her checking account from her earnings to make the contributions to her IRA,

so she relied instead on funds from her separate Platinum savings account. 71 She

supported her testimony with statements from her WaMu Platinum account, pointing out

on cross-examination that funds were transferred from her savings account on both

occasions in order to make the contribution. 72




       68 RP at 270; Ex. R-119, at 13-17. 

       69 RP at 273; Ex. R-119, at 18. 

       70 Ex. R-lOS. 

       71 RP at 346-47. 

        Id.; Ex. R-119, at 3-4 (showing $3,000 withdrawal from Platinum account and 

       72
corresponding contribution on 4/15); id. at 8-9 (showing $4,000 withdrawal from
Platinum account and corresponding IRA contribution for tax year 2006).

                                              28 

No. 32274-2-111
In re Marriage ofSchwarz


       In summary, Ms. Champagne testified to nine assets that she demonstrated

predated the parties' marriage. She testified to how some of those assets came to repose,

by the time of the dissolution action, in the Western National IRA, Bank of America IRA,

and D.A. Davidson account whose characterization as community property she

challenges on appeal. In addition to her testimony, she offered positive documentary

evidence of the transfer and reinvestment of the assets.

       Mr. Schwarz responds with three arguments in support of the court's

characterization of the three assets as community property. He argues, first, that deposits

to the IRAs and stock brokerage account came in some instances from an allegedly

community property "account [number []7II3] held in both parties' names at [WaMu,]"

Br. ofResp't at 12; that deposits came in some instances from an allegedly community

property "account [number []7792] ... at Washington Mutual Savings Bank," id. at 15;

and that the assets in the D.A. Davidson account were commingled and cannot be

apportioned. Id. at 18-24. We address Mr. Schwarz's arguments in the context of each

of the three assets whose characterization Ms. Champagne challenges.

                       A. Ms. Champagne's Western National IRA

       As previously discussed, Ms. Champagne offered her testimony and account

statements demonstrating that at the time of her marriage to Mr. Schwarz, she had an IRA

maintained at WaMu with a date of marriage value of approximately $5,770, which she

eventually rolled over into an annuity policy that she held first at AI G and later at

                                              29 

No. 32274-2-III
In re Marriage ofSchwarz


Western National. Mr. Schwarz has never disputed that the origin of the Western

National IRA was the separate property WaMu IRA. He does dispute the character ofthe

$3,000 and $4,000 contributions that Ms. Champagne made to the IRA in April 2005 and

April 2007, while it was still at WaMu.

      Mr. Schwarz first argues on appeal that the WaMu accounts were in both parties'

names and characterizes them as joint. When cross-examined, Ms. Champagne was

asked about who owned the accounts and testified as follows:

              Q.... I noticed that, at the Washington Mutual Account, R-120,
      that in October of 1999, that was transferred into a j oint account?
              A. No. That's not ajoint account.
              Q. So R-120, let's go to R-120, and let's go to page 3. 73

Page 3 of Ex. R-120, which Ms. Champagne was asked to review, was the October 1999

opening statement for the WaMu account in Ms. Champagne's new, married, name and

includes the following in the upper left hand comer:

      SUSAN MARIE SCHWARZ 

      DAMIAN A SCHWARZ 

      2904 WEST RIVERVIEW DR 

      SPOKANE WA 99205 


The Riverview Drive address is that of Mr. Schwarz's home, where the parties lived

during the marriage.

      The cross-examination continued:



      73   RP at 334-35.

                                           30
No. 32274-2-111
In re Marriage a/Schwarz


                Q. . .. Do you see that there please?
                A. I do.
                Q. Is your husband on that account?
                A. He's on that account as a payable on death beneficiary. I'm the
         one that set up the account. I have never made any of my accounts a joint
         account with my husband.
                Q. SO in terms of how this account is held, what we have here is the
         upper, left-hand corner, your name and his name. Do you have any
         evidence in the record that establishes that this is not a joint account?
                A. Yes. If you look at the middle of the statement, it's only in my
         name, Susan Marie Schwarz. The upper left-hand name is an addressee on
         the account statement. 74

We insert the information in the middle of the statement on page 3 of Ex. R-120 to

which Ms. Champagne pointed (the account number has been reduced to its last four

digits):

     GUARANTEED GREAT RATE         WASHINGTON MUTUAL BANK 	                               FDIC INSURED 


     SUSAN MARIE SCHWARZ 	                                    ACCOUNT NUMBER:

                                                              OV!RDRAFT LI"IT                    100.00
                                                 SUBJECT TO A PER ITE" OVERDRAFT TRANSACTION CHARGE
l   BEGINNING BALANCI        TOTAL WITHDRAWALS           TOTAL DEPOSITS              ENDING BALANCE        I
j   .
                     .00                   .00                ftS,OOS.6S                  48,008.68        l

Ms. Schwarz conceded at the 2013 trial that she did not produce documents showing how

the account had been opened 14 years earlier, testifYing, "I don't believe I have those

records. I opened the account myself. ,,75




           74   RP at 335.
           75Id.

                                                 31
No. 32274-2-III
In re Marriage ofSchwarz


         Ms. Champagne's exhibits included copies of dozens of checks drawn on her

WaMu checking account and numerous monthly statement copies for that and other

WaMu accounts. 76 The account holder retlected on all of the checks is "Susan M.

Schwarz.'>?? WaMu's monthly "CONIBINED STATEMENT OF ACCOUNTS" in

evidence are all addressed solely to "Susan Marie Schwarz."78 "Detail Information" for

her individual accounts refer in most instances to "SUSAN MARIE SCHWARZ TR FOR

DAMIAN A SCHWARZ."79 When she opened accounts with Bank of America in

September 2008 upon WaMu's demise, her bank account statements for that account

were addressed to "SUSAN M SCHWARZ, POD DAMIAN A SCHWARZ."80

         It is only the earliest statements for the WaMu savings account, covering periods

from October 1999 through June 2002, that are addressed to "Susan Marie Schwarz,

Damian A Schwarz," but, as Ms. Champagne pointed out in cross-examination, each

identifies the account, by account number, as the account of "Susan Marie Schwarz."81



      76 Ex. R-l1S, at 1-8, 13; Ex. R-119, at 4-7, 9-12; R-120, at 1-3, S, 7-9,13-14;
R-122; R-123; R-102, at 1-6.
         77   See Exs. R-102, at 1-6, and R-l1S, at 13.
         78 Ex. R-llS, at 1 (Aug. 2008), S (Sept. 2008); R-119, at 6 (Apr. 200S), 10 (Apr.
2007).
         E.g., Ex. R-lIS, at 2-3,6-7, but cf Ex. R-lIS, at 4, 8 ("Money Market Savings
         79
Detail Information" referring to only "Susan Marie Schwarz").
         80   E.g., Ex. R-llS, at 9,10,14; Ex. R-118, at 1.
         81 Ex. R-120, at 3, S, 7-9.

                                                32 

No. 32274-2-III
In re Marriage ofSchwarz


       Since Ms. Champagne demonstrated the separate character of her premarital

WaMu savings account, a presumption arises "that it remained separate property in the

absence of sufficient evidence to show an intent to transmute the property from separate

to community property." Borghi, 167 Wn.2d at 484. Even if Mr. Schwarz had

demonstrated that Ms. Champagne opened and maintained joint bank accounts after they

married, "[t]he separate or community character of property is not determined by the title

name under which it is held." Id., 167 Wn.2d at 492 (Madsen, J., concurring). Mr.
                                                                                             f
                                                                                             t


                                                                                             I
Schwarz did not testify to any understanding that Ms. Champagne had ever added him to

her bank accounts; his consistent testimony was that the parties intended to keep their

accounts separate. His lawyer's argument that Ms. Champagne's WaMu accounts were

joint rests entirely on the fact that the address on the account statements included both

parties for a time and that some accounts later bore indications that Ms. Champagne had

identified her husband as a beneficiary.

       This was not enough to demonstrate that Ms. Champagne ever opened a joint

account or intended to transmute her separate WaMu account into community property.

The trial court's memorandum decision includes no finding that any such transmutation

was intended or occurred. Because the trial court did not find that the WaMu accounts

were joint accounts at any time, we do not consider this argument further.

       Mr. Schwarz also suggests that the accounts became community accounts through

commingling. Ms. Champagne testified that she deposited her paychecks to the Free

                                             33 

No. 32274-2-II1
In re Marriage ofSchwarz


Checking account and kept her separate property in the linked savings account. 82 The

account statements in evidence support her testimony. The exhibits include checking

account statements from 2005, 2007 and 2008, all of which show the deposit of her

"TRlCOM" and "WELLS ST JOHN" paychecks into the Free Checking Account. 83

They reveal that all checks were written from the Free Checking Account, whose ending

balances were in the hundreds or several thousands of dollars, while the ending balances

of her Platinum or Money Market Savings accounts were in the tens of thousands of

dollars. 84 The documentary evidence provides consistent support (albeit not 13 years'

worth of exhaustive monthly support) for Ms. Champagne's testimony that while the

several WaMu accounts were linked, her wages were deposited into the Free Checking

Account and her separate property was maintained in the Platinum Checking Account. 85

       The trial court's memorandum decision does not address whether Ms.

Champagne's Platinum and Money Market Savings Accounts at WaMu were separate or

community. It does, however, address the character of the Bank of America accounts

into which she transferred the funds she had held until 2008 at WaMu. As earlier

observed, the trial court concluded, "the Court is fully satisfied that the wife successfully



       82   RP at 337-38. 

       83   Ex. R-119, at 7, 11; Ex. R-115, at 2,6. 

       84   Ex. R-1l9, at 6,10; Ex. R-115, at 1-4. 

       85   See Ex. R-119, at 4-12; see RP at 346-47. 


                                               34 

No. 32274-2-III
In re Marriage ofSchwarz


traced by clear and convincing evidence that these accounts were and are comprised of

funds that were the Respondent's separate property prior to marriage and have not

otherwise been commingled."86 On that basis, the court awarded both Bank of America

accounts to Ms. Champagne.

       Ms. Champagne argues that it follows necessarily from the trial court's

characterization of the Bank of America accounts that she adequately traced her savings

before marriage into her several savings-type accounts at WaMu. We agree. While Mr.

Schwarz argues that the WaMu and Bank of America accounts "were two different

accounts and, of course, there was a substantial lapse of time between the contributions

and the characterization of these Bank of America accounts as her separate property at

the time of trial," Br. of Resp't at 13, we cannot ignore the fact that the trial court did not

speak to the WaMu accounts at all. The court's silence as to the WaMu accounts implies

that it viewed Ms. Champagne's undertaking to trace her savings through the entire

marriage as a singular undertaking, culminating with Bank of America accounts that the

court found to be separate. In evaluating the character of the remaining disputed assets,

then, we treat Ms. Champagne's savings-type accounts as her separate property.

       Nonetheless, despite its characterization of the Bank of America accounts as

separate, the trial court characterized her Western National IRA, which originated before



       86 CP at 101.

                                              35
No. 32274-2-111
In re Marriage ofSchwarz


marriage and had been contributed to thereafter only with funds from Ms. Champagne's

savings, as community property. Its memorandum decision characterized the testimony

offered on the Western National IRA as "[c]onvoluted and confusing" and found that Ms.

Champagne had failed to rebut the community property presumption. 87 Elsewhere, the

court lamented that "[m]uch of the testimony at trial" was convoluted and confusing, and

that the petitioner and respondent "provided the Court with almost none of the tools

necessary to resolve" many of the complex issues. 88

       "A trial court abuses its discretion when its decision is manifestly unreasonable or

exercised on untenable grounds or for untenable reasons, i.e., if the court relies on

unsupported facts, takes a view that no reasonable person would take, applies the wrong

legal standard, or bases its ruling on an erroneous view of the law." State v. Hudson, 150

Wn. App. 646, 652, 208 P.3d 1236 (2009). It appears likely that the trial court's mistake

in characterizing the Western National IRA as community property was a result of the

sheer volume of evidence on numerous assets presented during the two-day bench trial.

Notably, while the trial court's memorandum decision questioned Mr. Schwarz's

credibility on at least one issue (an issue not raised in this appeal) it never questioned Ms.

Champagne's credibility.


       87   CP at 103. 

       88   CP at 99-100 (emphasis added). 




                                               36 

No. 32274-2-111
In re Marriage a/Schwarz


       With the advantage of a transcribed record and a substantial narrowing of issues,

we can see that Ms. Champagne's evidence tracing this IRA, while presented amidst an

extraordinary amount of evidence addressing other issues, was not convoluted or

confusing, and that it was sufficient. The court abused its discretion in finding that Ms.

Champagne failed to rebut the community property presumption and in characterizing the

Western National IRA as community property.

                         B. Ms. Champagne's Bank of America IRA

       In April 2010, Ms. Champagne opened a new IRA at the Bank of America. 89

Funds to make the contribution were drawn from her Bank of America Select Money

Market Savings Account No. []2732. 90 As earlier detailed, Ms. Champagne's Bank of

America accounts were opened in September 2008 with funds from her WaMu accounts.

The savings account balance had grown to $31,113.21 by the time she used $4,200 to

fund the Bank of America lRA.91

       Ms. Champagne's Bank of America savings account is one of the accounts that the

trial court was "fully satisfied" had been "successfully traced.,,92 While the trial court

characterized the Bank of America IRA as community property based on a conclusory



       89 Ex. R-118, at 2. 

       90 Ex. R-118, at 1-2. 

       91 Ex. R-118, at 1. 

       92 CP at 101. 


                                             37
No. 32274-2-111
In re Marriage ofSchwarz


ruling that Ms. Champagne never "conclusively demonstrated"93 its separate character,

we are satisfied that because the IRA was demonstrably funded from a separate property

account, this is another instance in which the trial court was simply buried in a surfeit of

detail on dozens of issues. With simplified issues and a transcript of the trial, we can see

that Ms. Champagne's evidence was sufficient and that the trial court abused its

discretion in characterizing the Bank of America IRA as community property.

                   VI. D.A. DAVIDSON INVESTMENT ACCOUNT 


       Ms. Champagne's third challenge is to the trial court's characterization of her 


D.A. Davidson account as community property. Ms. Champagne offered evidence

tracing the assets in this account to eight sources, each of which she contends was her

separate property: her WM Financial Services account; her A.G. Edwards account; her

WaMu savings, last held in her Platinum account (and that included the proceeds of her

New York Life policy, the $39,192 cash distribution from her mother's estate, and her

IDS bond funds); and her Charles Schwab account (that included the proceeds of her

Cabletron shares). Each of the consolidations other than the Charles Schwab

consolidation took place in or before August 2000-within the first year of her marriage.

But Mr. Schwarz argues that community and separate assets were commingled in the




       93 CP at 104.



                                             38
No. 32274-2-II1
In re Marriage 0/ Schwarz


D.A. Davidson account, with the result that all of the assets are conclusively presumed

community property.

       If Ms. Champagne demonstrated the separate character of the eight contributory

assets, then they would retain their separate character as long as they could be traced or

identified. Pearson-Maines, 70 Wn. App. at 865. Again, it is only if community and

separate funds are so commingled that they may not be distinguished or apportioned is

the entire amount rendered community property. Id. at 866. In those instances that Ms.

Champagne acquired new assets during the marriage, she was required to overcome the

community property presumption by offering clear and convincing evidence that the new

asset was acquired with separate funds. Skarbek, 100 Wn. App. at 449. Acquiring new

assets does not include being credited with interest or dividends (stock or otherwise),

since the "rents, issues and profits" of separate property are inherently separate property.

RCW 26.16.010.

       Proof by clear and convincing evidence denotes a quantum or degree of proof

greater than a mere preponderance of the evidence, but something less than proof beyond

a reasonable doubt. Matter o/Demming, 108 Wn.2d 82, 109, 736 P.2d 639 (1987).

Evidence clearly and convincingly establishes a proposition if it makes the proposition

'''highly probable.'" Dalton v. State, 130 Wn. App. 653, 666, 124 P.3d 305 (2005)

(quoting In re Marriage o/Schweitzer, 132 Wn.2d 318,329,937 P.2d 1062 (1997».

Ordinarily, the testimony of a single credible witness can qualifY as clear and convincing

                                             39 

No. 32274-2-111
In re Marriage ofSchwarz


evidence, even if the witness's testimony is contradicted by other witnesses. See id. at

667 (holding that a single witness's testimony, contradicted by others but credited by the

trial court, satisfied the standard). But as earlier noted, overcoming the community

property presumption requires more than the "mere self-serving declaration" of a spouse

that 'she acquired an asset with separate funds and that separate funds were available.

Berol, 37 Wn.2d at 382. This makes sense, since in most cases the source of funds used

for a purchase is not the sort of fact that even an honest person would reliably recall years

later. It is reasonable to require the party's testimony to be supported by, e.g.,

documentary evidence, an admission by their party-opponent, or the testimony of another

witness.

       Here, Ms. Champagne presented evidence that five of the eight assets that

eventually ended up (or whose proceeds ended up) in the D.A. Davidson account were

acquired before the parties were married. Her exhibits include statements showing her

premarital ownership of the WaMu savings account, the A.G. Edwards account, the WM

Financial account, the IDS bond funds, and the Cabletron stock. Mr. Schwarz did not

challenge the separate character ofthose initial assets.

       Ms. Champagne produced an estate distribution summary to support her testimony

that one of the assets acquired after the marriage-the $39,192 cash distribution she

received in December 1999-was an inheritance, and thereby separate property. Mr.

Schwarz claimed to have received an inheritance of his own during the marriage, and the

                                             40 

No. 32274-2-111
In re Marriage ofSchwarz


trial court accepted its characterization as separate property where Mr. Schwarz

supported his testimony with a closing statement. 94 The estate distribution summary

offered in evidence by Ms. Champagne is somewhat informal but not atypical of a family

settlement of an uncontested estate.

       The evidence showed that Ms. Champagne possessed another of the assets, the

New York Life policy, during the marriage, but there was no evidence that she acquired

the whole life policy after marrying Mr. Schwarz in September 1999. As with Mr.

Schwarz's Charles Schwab IRA, then, only the weak presumption that property

possessed during marriage applies to the policy, a presumption that is overcome by a

preponderance of the evidence. And as with Mr. Schwarz's IRA, the fact that she

possessed the property early in the parties' marriage-a mere four months into the

marriage-makes the presumption particularly weak.

       In the case ofMr. Schwarz's IRA, we recognized that his testimony alone was

sufficient to overcome this weak presumption. Here, the explanation of benefits that Ms.

Champagne offered as evidence provided additional circumstantial evidence supporting

her testimony that she acquired the policy well before the parties' marriage: it identified

"Elements that Comprise the Cash Value Settlement" as including a several thousand

dollar "Value of Paid Up Additional Insurance," a couple thousand dollar "Value ofOpp



       94   RP at 78-79; CP at 104.

                                             41
No. 32274-2-III
In re Marriage ofSchwarz


Paid-Up Additions'" and a policy loan. 95 Mr. Schwarz offered no evidence challenging

the separate character of the policy.

       Finally, if we look beyond the premarital $15,000 loan and analyze the Charles

Schwab account opened in May 2004 to repay the loan as an asset acquired during the

marriage, Ms. Champagne's testimony that it was acquired in repayment of a separate

property loan is supported by Mr. Schwarz's admissions. He admitted that the initial

securities in the account were all ones that he transferred to her at that time. 96 He also

testified, when asked ifhe had borrowed $15,000 from Ms. Champagne, "I don't recall,

to be honest. Not like it's not true, but I don't recall."97 Collectively, her testimony, the

monthly statement, and Mr. Schwarz's admissions would be sufficient to overcome the

community property presumption.

       In the case of each of the eight assets, then, we conclude that Ms. Champagne's

evidence, if believed by the trial court, was sufficient to establish their initially separate

character. The trial court's memorandum decision and its eventual findings do not

identifY any of Ms. Champagne's evidence that it found untrustworthy.

       Turning to the requirement that assets be traced to retain their separate character,

we hold that Ms. Champagne's burden was not to provide an exhaustive accounting. In


       95 Ex. R-120, at 6 (some capitalization omitted). 

       96 RP at 138. 

       97Id.


                                              42
No. 32274-2-III
In re Marriage ofSchwarz


Skarbek, 100 Wn. App. at 449-50, this court observed that the husband in that case

overcame the presumption that funds in a joint account were community property by

"exhaustively documenting the details of the bank account activity" to the satisfaction of

the trial judge, but we merely affirmed in that case that the husband's evidence was

sufficient, not that exhaustive documentation is necessary. The Skarbeks' marriage had

lasted only three years, and the activity documented by Mr. Skarbek was all quite recent.

In a longer-term marriage where relevant financial activity took place many years earlier,

it is unrealistic to require exhaustive documentation, and, in a case like this, unhelpful.

"Exhaustive" documentation of the many accounts and assets involved in this case would

have been overwhelming. Only a small part would be important.

       Instead, the requirement that assets be traced required Ms. Champagne to

demonstrate by clear and convincing evidence that any acquisition of "new" assets she

claimed as separate was with the proceeds of separate assets. In almost all cases, Ms.

Champagne met this burden.

       Ms. Champagne acknowledged that she failed to retain and was unable to produce

in discovery or provide the court with exhaustive statements of her accounts before their

ultimate consolidation into the D.A. Davidson account. But in this respect, she was on no

different footing than Mr. Schwarz. He was unable to produce statements for his Charles

Schwab IRA account number []5129 for periods before April 2003, explaining that

despite exercising "due diligence," he had been "unable to secure these out-of-date

                                             43 

No. 32274-2-111
In re Marriage ofSchwarz


records from the custodian."98 In support of his testimony that the IRA was his separate

property, he offered only two statements-his statements for April 2003 and January

2007. 99

       Ms. Champagne's burden of tracing did not require her to provide exhaustive

records showing every deposit and withdrawal into the multiple bank and stock brokerage

accounts. The standard of "clear and convincing" evidence never requires irrefutable

evidence; it does not even require proof beyond a reasonable doubt. It does require

positive evidence, direct or circumstantial, that makes a proposition highly probable.

And in the present context, when overcoming the community property presumption, it

requires more than the self-serving testimony of the owner of the allegedly separate

property. Once clear and convincing positive proof is offered to rebut the community

property presumption, it is up to the party without the burden to contradict that evidence

or introduce doubt.

       In this case, Mr. Schwarz never contested the continuously separate property

character of the eight assets that ended up in the D.A. Davidson account-to the contrary.

When asked about Ms. Champagne's assets, he testified that he "did not mettle [sic] in

her accounts or anything," because "we were supposed to keep it separate and split the




       98 CP at 77. 

       99 Ex. P-19. 


                                            44 

'i '
I
I
II     No. 32274-2-III
       In re Marriage ofSchwarz


i      bills."IOO He merely relied on his lawyer to challenge whether Ms. Champagne had met 



I
     her burden. 


              Ms. Champagne traced some assets in the WaMu account to and from the D.A. 

I

I
     Davidson account, and ultimately traced all of the assets in the WaMu account to the 



!
     Bank of America accounts. She traced the assets from the A.G. Edwards account and 


I      from the WM Financial account into the D.A. Davidson account. The fact that mutual 

I      fund share numbers increased slightly over time does not detract from her evidence; she

I      testified and offered supporting documentary evidence that she had elected dividend

       reinvestment, so it was to be expected that the number of shares would increase. As
I      earlier observed, dividends on separate property are themselves separate property.

              The only instances in which Ms. Champagne failed to trace assets into the D.A.

       Davidson account were in the case of her IDS bond funds and Cabletron stock. She

       could not trace the $8,073.96 deposit to her WaMu checking account to the sale of

       allegedly appreciated bond funds and admitted that her subsequent deposit of $1 0,000 to

       her D.A. Davidson savings account included at least $1,900 in community funds. While

       she could trace her Cabletron shares into an E-Trade account and trace her purchase of

       Cisco shares to proceeds of Cabletron stock sales, she could not trace her account transfer

       from a different E-Trade account to those original Cabletron or Cisco shares. Those two



              100   RP at 132.

                                                   45
II
I
     No. 32274-2-III

I
I
     In re Marriage ofSchwarz

I
I    contributors to the D.A. Davidson account-(l) the $10,000 transferred from checking to

!    savings in July 2000 that was ultimately contributed to the D.A. Davidson account in

     August 2000 and (2) the 500 Cisco shares contributed in September 2009~an be


I    distinguished and apportioned. While the eight contributors to the D.A. Davidson


I,
I
     account required a considerable amount of effort to explain and document, they did not

     give rise to hopeless commingling.

            There are likely several ways to apportion for those contributions. The fact that a

     marital asset cannot be apportioned to the penny will not excuse the court from

     apportioning it; any reasonable approach to apportioning is acceptable and in arriving at

     final figures, the benefit of the doubt can be given to the community. We suggest an

     apportionment in an appendix.

        VII. EQUALIZATION PAYMENT AND MOTION FOR RECONSIDERATION

            Ms. Champagne's rem~ining two assignments of error are that the court abused its

     discretion when it ordered her to make an equalization payment and when it denied her

     motion for reconsideration. Given our reversal of the trial court's characterization of

     three assets and our remand to the trial court to modify its characterizations and revisit its

     property distribution, these remaining issues are moot.




                                                  46 

No. 32274-2-111
In re Marriage ofSchwarz




      We reverse and remand for proceedings consistent with this opinion.




WE CONCUR: 





                                 j





                                          47 

No. 32274-2-III
In re Marriage ofSchwarz
Appendix



                                       APPENDIX

         l.   The $10,000 that Ms. Champagne attributes to the IDS bond fund but as to

which she has not overcome the community presumption was deposited to her WaMu

savings account in July 2000. See RP at 234. We do not have Ex. R -131 in our record,

but do have the February WaMu statement with an ending balance of$84,725 and the

September statement with a beginning August 22 balance of$95,912. See Ex. R-120, at

7-8. The $10,000 attributed to the IDS bond fund is retlected in the August 22 balance.

         2.   It was on August 22 that $56,000 was withdrawn from the WaMu account

for deposit to the D.A. Davidson account. See Ex. R-120, at 8 and Ex. R-121, at 7,9.

Since money is fungible and it is simplest to make the apportionment in the D.A.

Davidson account (since it was the final repository of the separate assets), treat $10,000

of the $56,000 deposited to the D.A. Davidson account as presumptively community

funds.

         3.   The August month-end value of the D.A. Davidson account is $112,582.22.

Ex. R-121, at 7. Consistent with Mr. Carlson's approach in dealing with Mr. Schwarz's

IRA, treat $10,000 + $112,582.22 or 8.88 percent of the D.A. Davidson value thereafter

as presumptively community property and 91.12 percent of the value thereafter as

separate property.




                                            48 

No. 32274-2-111
In re Marriage ofSchwarz
Appendix


       4.     The last D.A. Davidson account in our record is the May 2012 statement,

revealing a month-end value of $106,611.53. Reduce that value by the month-end value

of the 500 Cisco shares, which is $8,165, and three years' worth of the "ESTIMATED

ANNUAL INCOME" from Cisco as disclosed by the statement, which is a total of

$480.00, to arrive at a value, net of Cisco, of $97,966.53. See Ex. R-121, at 31.

       5.    Apply the percentages to adjust for the separate and presumptively

community shares of the account arising from the $10,000 deposit in July 2000. The

91.12 percent of $97,966.53 demonstrated by Ms. Champagne to be separate property is

$89,267, rounded. $8,699, rounded, is community property.




                                            49 

