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2004-UP-103 - Lautner v. Lautner

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Pamela Ann Lautner,        Respondent,

v.

Jack Louis Lautner,        Appellant.


Appeal From Greenville County
Timothy M. Cain, Family Court Judge


Unpublished Opinion No. 2004-UP-103
Submitted February 9, 2004 – Filed February 18, 2004


REVERSED AND REMANDED


Bruce W. Bannister, of Greenville, for Appellant

Pamela A. Forrest, of Fountain Inn, pro se.

PER CURIAM:  In this action, Jack Lautner (Husband) appeals an order by the family court regarding the equitable distribution of marital property owned by him and his wife, Pamela (Wife).  He argues the family court erred in finding passive earnings on the nonmarital portion of a retirement account to be marital property.  We reverse and remand. [1]

FACTS

Husband and Wife were married in 1985 in Greenville County.  They separated on April 11, 2000, and this domestic action followed.  At the time of the marriage, Husband worked for Hart Graphics, Inc., which provided a 401(k) retirement account.

At the initial hearing, it was agreed by the parties that portions of this account were earned prior to the marriage and that other portions were marital property.  The parties agreed that Wife would provide the court with appropriate records from the retirement plan administrator as to the value of the account on the date of the marriage and that Husband’s expert would calculate the amount of passive increases thereto.  At the second hearing, however, neither party presented an official record as to the exact amount of the account on the date of the marriage.  Husband informed the court that he was unable to obtain this information from the plan administrator.

Notwithstanding the lack of official records as to the value of the account on the date of the marriage, both parties presented evidence concerning this non-marital portion and the passive increases thereafter accumulated.  Wife’s expert was not present at trial and was not subject to any cross-examination as to his qualifications or methods. All evidence provided by him was in the form of a one-page report.  Husband’s expert appeared at trial and seemed to base his testimony on additional data not considered by Wife’s expert.  The judge found the report and evidence presented by Husband’s expert to be the most reliable and allocated this report’s recommended $16,606 as the pre-marital contribution amount.  The judge also found that this amount has since earned passive increases of $64,485.  While not waiving any claim to these passive increases, Wife’s counsel did stipulate to the method of calculation of the value of the premarital portion of the account.

In his final order concerning the equitable distribution of the property, the judge awarded Husband a credit for the premarital contribution amount, but deemed all passive increases “marital property” and divided this amount between the parties.  Husband appeals, arguing that the judge erred in holding that passive earnings on the nonmarital portion of the retirement account constituted marital property.

STANDARD OF REVIEW

In appeals from the family court, this court has the authority to find facts in accordance with our own view of the preponderance of the evidence.  Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996).  This broad scope of review, however, does not require us to disregard the findings of the family court judge, who saw and heard the witnesses and was in a better position to evaluate their credibility and assign comparative weight to their testimony.  McElveen v. McElveen, 332 S.C. 583, 591, 506 S.E.2d 1, 5 (Ct. App. 1998).

LAW / ANALYSIS

Under South Carolina law, it is clear that a passive increase in the value of a pre-marital investment, unless the investment is transmuted into marital property, remains nonmarital property and is not subject to equitable division by order of the family court. 

The family court does not have jurisdiction or authority to apportion nonmarital property.  See S.C. Code Ann. § 20-7-473 (Supp. 2003) (“The court does not have jurisdiction or authority to apportion nonmarital property.”).  Marital property is statutorily defined as any property “acquired by the parties during the marriage.” Id.  The statute also clearly states that any “increase in value in nonmarital property, except to the extent that the increase resulted directly or indirectly from efforts of the other spouse” remains non-marital property.  Id. § 20-7-473(5); See also Johnson v. Johnson, 296 S.C. 289, 294, 372 S.E.2d 107, 110 (Ct. App. 1998) (finding passive earnings on a nonmarital IRA account to be nonmarital property).

In the case before us, the family court judge found, and the parties agreed, that a portion of Husband’s retirement fund was nonmarital property invested prior to the marriage.  This amount was stipulated and properly credited to Husband.  The amount of earnings, however, that this amount had accrued through no effort by either spouse was wrongfully split between Husband and Wife.  Having determined at trial that $64,485 of the retirement fund was attributable to passive earnings on nonmarital investments, it was then error to divide this portion of the fund between the parties. Unless transmuted or the result of efforts by the claiming spouse, any increase in the value of nonmarital property is itself nonmarital property. See Johnson, 296 S.C. at 294, 372 S.E.2d at 110; Calhoun v. Calhoun, 331 S.C. 157, 174, 501 S.E.2d 735, 744 (Ct. App. 1998), reversed in part 339 S.C. 96, 529 S.E.2d 14 (2000). 

In rather conclusory fashion, Wife claims for the first time on appeal that the retirement account became marital property through transmutation.  While in certain circumstances nonmarital property may be transmuted into marital property, the spouse asserting this transmutation “must produce [at trial, not on appeal] objective evidence showing that, during the marriage, the parties themselves regarded the property as the common property of the marriage.” Johnson, 296 S.C. at 298, 372 S.E.2d at 110-11.  Wife cites no such evidence, nor can we find any, in the record on appeal. [2]

For the foregoing reasons, the order of the family court, holding that passive earnings on the non-marital portion of the retirement account constituted marital property, is

REVERSED.  We REMAND for a recalculation of the equitable distribution award.

HEARN, C.J., ANDERSON and BEATTY, JJ., concur.


[1] We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] In her responsive brief, Wife also makes vague claims of collusion and misrepresentations at trial. We deem these claims abandoned due their conclusory nature and the fact they are not in any way supported by the record. See Bowen v. Lee Process Sys. Co., 342 S.C. 232, 536 S.E.2d 86 (Ct. App. 2000) (holding that the failure to provide argument or supporting authority for an issue renders it abandoned); Zaman v. South Carolina Bd. of Med. Exam’rs, 305 S.C. 281, 408 S.E.2d 213 (1991) (holding that an appellate court will not consider any fact which does not appear in the record on appeal).