Supreme Court of Alaska (2022)
In Womack v. Jones, 2022 WL 1565679 (Alaska May 18, 2022), reh’g denied (June 23, 2022) (unpublished), the supreme court affirmed the superior court’s interpretation of a settlement agreement in a divorce decree dividing the profits of the sale of the marital home based on cost-of-sale, less the husband’s renovation expenses for materials but not for labor. (Id. at *1). A divorcing couple entered a settlement agreement which stated the husband would sell the couple’s marital home, after which the two would split the proceeds evenly. (Id.). They agreed that the husband would make repairs necessary to sell the home and would be reimbursed “off the top” of the proceeds, after which the two would split the rest. (Id.) During the parties’ settlement hearing, they agreed that the husband would renovate the home and be reimbursed for materials, but did not agree that the husband’s own labor costs would be reimbursed. (Id. at *3). The superior court issued an order awarding the wife slightly less than half of the remainder from the sale price, less materials and supply costs. (Id.). On appeal, the husband argued that the settlement agreement dictated that distribution of profits from the home sale ought to be determined by the pre-renovation value of the home, from which renovation costs, including labor, should be subtracted before the remainder was split between the parties. (Id.). The supreme court affirmed the lower court’s order, reasoning that the plain language of the settlement agreement unambiguously provided that calculation of profit from the sale of the marital home is to be the “cost of sale,” not its pre-renovation value. (Id.). The court further reasoned that, as the parties expressly contemplated and agreed upon the payment of third parties for any labor spent renovating the home but only agreed that the husband would be reimbursed for materials and supplies, the husband’s labor was not reimbursable. (Id.). Affirming the superior court’s decision, the supreme court held that the plain language of a divorcing couple’s settlement agreement detailing the process for sale of the marital home provided for distribution of profits based on cost-of-sale, less the husband’s renovation expenses for materials but not for labor. (Id.).