## Facts

- Shubneesh Batra, a Micron Technology engineer, received Micron stock options beginning September 27, 1993; the options vested 20% per year and expired six years after the grant date.
- Shubneesh and Monica Batra married on July 14, 1995, and had one child (born September 10, 1996); they later separated and divorced.
- During the marriage, Shubneesh received additional option grants with multiple vesting tranches (“flights”); some options were granted before marriage but vested during marriage, and others vested after separation.
- The parties disputed (1) how to characterize and apportion the stock options between separate and community property, (2) whether stock purchases/option exercises were funded with traceable separate property or commingled funds, and (3) Monica’s claims to four sets of gold jewelry given by her parents at the wedding (valued by her at about $10,000) and a gold coin purchased during the marriage.
- The magistrate divided property using a modified time-rule formula for the options, treated certain stock as community property due to inadequate tracing, and ordered Shubneesh to return the jewelry or pay its value and to reimburse Monica $203 for her interest in the gold coin.
- On intermediate appeal, the district court largely affirmed but remanded for calculation of tax consequences from the property division; both parties then appealed/cross-appealed.

## Issues

1. Whether the trial court properly characterized and apportioned Micron stock options using a modified time rule for options vesting over time, including options granted before marriage but vesting during marriage.
2. Whether the trial court erred in treating certain Micron stock as community property where the claiming spouse asserted separate-property funding but accounts were commingled.
3. Whether the evidence supported ordering return/value of Monica’s wedding gold jewelry and reimbursement for her interest in a gold coin.
4. Whether the valuation and allocation method for stock options, including tax consequences, was proper.

## Decision

- The court affirmed the use of a modified time rule to apportion stock options based on vesting during the marriage as a fair method consistent with community-property principles.
- The court vacated and remanded the calculation of the community interest in a particular pre-marital grant of 1,514 options because the community share had not been correctly computed under the adopted rule.
- The court affirmed the finding that Shubneesh failed to adequately trace separate funds through commingled accounts; the disputed stock could be treated as community property.
- The court affirmed the orders requiring Shubneesh to return the gold jewelry or pay its value and to reimburse Monica $203 regarding the gold coin.
- The court remanded for proceedings limited to recalculating the community interest in the 1,514 options and aligning the associated tax consequences with the corrected community/separate allocation.

## Legal Principles

- Stock options that vest over time may be apportioned between separate and community property using a time-based formula that links the community share to vesting (or earning) occurring during marriage.
- The community does not automatically receive an interest in all unvested options outstanding at divorce; the allocation must reflect when the options were earned/vested relative to the marital period.
- A spouse claiming an asset is separate property bears the burden to trace separate funds through commingled accounts; failure to trace supports treating the asset as community property.
- Appellate courts defer to trial-court credibility findings and will uphold property awards supported by substantial, competent evidence.
- Tax consequences from exercising or distributing options should be allocated consistently with the separate/community characterization of the underlying option interests.

## Conclusion

The court upheld a modified time-rule approach for dividing vesting stock options and enforced strict tracing requirements for commingled funds, while affirming awards related to gifted jewelry and a gold coin; it remanded only to correct the community-interest calculation for a specific 1,514-option grant and to align related tax consequences.


Batra v. Batra, 17 P.3d 889 (Idaho Ct. App. 2001)