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2004-UP-322 - Dillman v. Dillman
PER CURIAM: Charles Dillman, as personal representative of the Estate of Kenneth Lew Dillman, appeals numerous equitable dist

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Cheryl Moyer Dillman,        Respondent,

v.

Mitchell Foy Dillman, personal representative for the Estate of Kenneth Lew Dillman,        Appellant.


Appeal From Beaufort County
Alvin D. Johnson, Family Court Judge


Unpublished Opinion No. 2004-UP-322
Heard March 11, 2004 – Filed May 14, 2004


AFFIRMED IN PART, REVERSED IN PART,
 AND REMANDED


John S. Nichols, of Columbia and William Randall Phipps, of Hilton Head Island, for Appellant. 

Patrick James Thomas Kelley, of Bluffton, for Respondent.

PER CURIAM:  In this domestic action, Mitchell Foy Dillman (Estate), as personal representative of the Estate of Kenneth Lew Dillman (Husband) [1] , alleges numerous errors in the family court’s order on equitable distribution, the alimony award, and attorney’s fee award in favor of Cheryl Moyer Dillman (Wife).  We affirm in part, reverse in part, and remand. 

FACTS

Husband and Wife were married in Switzerland on October 8, 1989, and were remarried three days later in the United States.  Prior to their marriage, they purchased a lot on Hilton Head Island.  The deed conveyed a two-thirds interest to Wife and the remaining one-third to Husband.  They later built a house on this lot and Wife paid $364,000 of the $443,000 total cost of the land and construction.  In February 1993, Wife conveyed one-sixth of her interest to Husband, thereby vesting each with an undivided one-half interest in the property. 

In December 1991, Wife loaned Husband money taken from her life insurance policies and funds from her investment account.  Husband used the funds to satisfy outstanding mortgages on two quad lots in an apartment complex he owned in Hinesville, Georgia (Hinesville Apartments). [2]   Wife received notes and mortgages on the two lots as security for the loan.  Both parties agreed Husband had significantly paid down the notes at the time of trial but disagreed as to the remaining balance due. 

Early in 1994, Husband borrowed a substantial sum from a bank, which he secured by a mortgage encumbering the couple’s Hilton Head Island home.  He used approximately two-thirds of the proceeds of the loan to satisfy mortgages on five more quad lots at his Hinesville Apartments, and deposited the remaining amount into his personal securities account.  By the time of the final hearing in family court, Husband had repaid the entire amount due on this loan. 

In September 1995, Wife loaned Husband $30,000 from her Merrill Lynch checking account.  Husband combined these loan proceeds with personal funds to purchase a lot in Sun City, Hilton Head, in March 1996.  Both parties testified Husband repaid at least $15,730 of the loan just prior to purchasing the property. 

In June 1999, Wife became suspicious that Husband was having an extramarital affair after discovering notes written to him by a woman the couple had met while vacationing in France.  Husband had taken a trip without Wife at the time and place discussed in the notes.  Upon his return, Wife discovered a used prophylactic in the garbage.  Husband denied he and the woman traveled together and claimed he shared his hotel room with a gentleman he met on the tennis courts.  Wife testified Husband’s extramarital affair was the cause of the breakup of their marriage, but Husband claimed the marriage had broken down prior to his involvement with the other woman. 

In September 1999, Wife brought this action for divorce, seeking equitable distribution of marital property, separate maintenance and support, and attorney’s fees.  Both parties requested their antenuptial agreement be recognized for purposes of equitable distribution. [3]   However, after reviewing the agreement, the family court ruled the agreement was void, a ruling neither party appealed.  The court bifurcated the trial, granting Wife a divorce, and reserving all other issues for a later hearing.  At that hearing, the court divided the marital assets, awarded Wife alimony of $1,000 per month, issued a mutual restraining order, and required Husband to pay $20,000 of Wife’s attorney’s fees.  The order permitted a termination of alimony only in the event of Wife’s death or remarriage, not providing for the eventuality of Husband’s death.

SCOPE OF REVIEW

When reviewing an appeal from the family court, we have the authority to find facts in accordance with our own view of the preponderance of the evidence.  We are not, however, required to disregard the findings of the judge, who saw and heard the witnesses and was in a better position to evaluate their credibility and assign comparative weight to their testimony.  Widman v. Widman, 348 S.C. 97, 109-110, 557 S.E.2d 693, 699-700 (Ct. App. 2001) (internal citations omitted).

LAW/ANALYSIS

I.  Equitable Distribution Issues

A.  Failure to Consider Statutory Factors

The estate asserts several errors regarding the family court’s findings and rulings on equitable distribution, among them contending the court failed to weigh the various factors contained in the statute [4] by failing to consider the existence of an antenuptial agreement and essentially ignoring the manner in which the parties conducted their financial affairs during the marriage.  We disagree. 

The statute lists the factors the family court must consider when making an equitable distribution award and vests the court with the discretion to determine the weight to be assigned each factor.  S.C. Code Ann. § 20-7-472 (Supp. 2003).  Contrary to the estate’s allegations, we find the court adequately considered the relevant factors and addressed them sufficiently in the final order so that this court is able to conclude it was fully cognizant of them.  See Jenkins v. Jenkins, 345 S.C. 88, 100, 545 S.E.2d 531, 537 (Ct. App. 2001) (citing Doe v. Doe, 324 S.C. 492, 502, 478 S.E.2d 854, 859 (Ct. App. 1996)).  As an appellate function, this court looks to the overall fairness of the apportionment, and if the result is equitable, taken as a whole, that this court might have weighed specific factors differently than the family court is irrelevant.  Bowers v. Bowers, 349 S.C. 85, 97, 561 S.E.2d 610, 616 (Ct. App. 2002). 

As to the antenuptial agreement, while it may provide evidence of the intention of the parties initially, it is not controlling because the prior order of the family court declared it void and there has been no appeal of that ruling.  Greenville County v. Kenwood Enters., Inc., 353 S.C. 157, 173, 577 S.E.2d 428, 436 (2003) (holding any unappealed portion of the trial court’s judgment is the law of the case and must therefore be affirmed). 

B.  Marital Fault

The estate further complains the court erred by concluding Husband’s involvement with another woman contributed to the breakup of the marriage and in considering such when making its award.  We disagree. 

The estate does not challenge the court’s conclusion that Husband was involved with another woman, but rather argues the marriage was irretrievably broken prior to any involvement.  The evidence, however, amply demonstrates Husband was corresponding with and secretly meeting the other woman prior to the parties’ divorce, and Wife testified that Husband’s infidelity contributed to the breakup of the marriage.  The family court found that Husband’s explanations for his behavior lacked credibility.  Accordingly, the court appropriately considered Husband’s fault in its final order.  S.C. Code § 20-7-472(2). 

C.  Marital Home

The estate complains the court erred by awarding Husband only a 20 percent interest in the marital home, arguing the court devalued his sweat equity and in-kind contributions made pursuant to a 5-year plan he alleges existed.  We disagree.

The court found Wife directly contributed a significantly greater portion of the cost of the house and land, Husband’s direct contribution was minimal, and the parties’ indirect contributions were essentially equal.  The estate asserts the court failed to properly weigh Husband’s efforts as general contractor during construction and, later, his responsibilities of running the household.  Husband relied heavily on a so-called 5-year plan contained in a document which Wife denied ever agreeing to.  We discern no abuse of discretion in the court’s decision concerning the marital home.  Ball v. Ball, 314 S.C. 445, 448, 445 S.E.2d 449, 451 (1994) (the family court has wide discretion in determining the contributions made by each spouse to the marital estate). 

The estate also complains about various other provisions of the court order relating to the marital home, including the value placed on it by the court allowing a 7 percent reduction in its valuation in the event Wife chose to buy Husband’s interest, in requiring a public auction in the event the parties could not agree to sell the house on the open market, and in making Wife responsible for any mortgage payment when there was none.  The appraisal the court accepted was the one prepared closest to the date of the filing of the pleadings, and because a private sale would involve a real estate commission, it was not erroneous for the court to authorize a reduction in the appraisal by a reasonable real estate commission if Wife chose to buy Husband’s interest.  The court’s order on these points was well within its discretion.  S.C. Code Ann. § 20-7-476 (Supp. 2003) (“The court in making an equitable apportionment may order the public or private sale of all or any portion of marital property upon terms it determines.”). 

D.  Treatment of Other Assets

The estate asserts the family court erred in identifying two units at Cotton Hope Plantation, a lot in Sun City, and Husband’s Merrill Lynch and AmeriTrade accounts as marital assets.  We disagree. 

The estate initially argues Husband provided almost all the funds for the purchase of the units in Cotton Hope Plantation and the lot in Sun City.  However, these were assets acquired during the course of the marriage and are therefore considered to be marital property which, by definition, includes “all real and personal property which has been acquired by the parties during the marriage and which is owned as of the date of filing or commencement of marital litigation.”  S.C. Code Ann. § 20-7-473 (Supp. 2003).  No question of transmutation exists with regard to these assets because they were not owned by Husband prior to the marriage.  Additionally, there is considerable credible evidence these assets were acquired with substantial funds of both parties which were commingled.  Also, the AmeriTrade account was opened during the course of the marriage and was funded by the Merrill Lynch account which, as discussed below, was transmuted into marital property.  Consequently, it is also a marital asset subject to apportionment by the family court.

Husband did open the Merrill Lynch account prior to the marriage.  However, there was evidence that during the course of the marriage Husband made several principal contributions from the parties’ joint funds.  There was also testimony that Husband deposited monies from the building account maintained by the parties for the marital residence into the Merrill Lynch account.  Husband offered no record of deposits and disbursements for this account.  We therefore conclude there was evidence of significant commingling of marital funds unto this account and, as a result, the account was transmuted into a marital asset subject to apportionment.  See Hussey v. Hussey, 280 S.C. 418, 423, 312 S.E.2d 267, 270 (Ct. App. 1984) (holding nonmarital property can become transmuted into marital property when it becomes so commingled as to be untraceable). 

II.  Transmutation of Hinesville Apartments

The estate argues the family court erred by holding the totality of Husband’s Hinesville Apartments had been transmuted into marital property and by granting Wife a 30 percent equity interest therein.  We agree.

Husband acquired the Hinesville Apartments prior to the marriage.  In December 1991, Wife borrowed $158,000 against her life insurance policies and loaned the proceeds plus a check drawn on her Merrill Lynch account for $7,750 to Husband.  Husband used the $165,750 to satisfy outstanding mortgages only on quad lots 7 and 9.  Husband executed two $82,875 promissory notes with mortgages on those two quads in favor of Wife as security for the loan.  Each note had a variable rate calculated to be one percent above the rate paid by Wife.  Husband claimed he paid down the notes to a balance of $81,587 as of March 1, 2001 and was current with his payments.  At trial, Wife agreed Husband was current with his payments at the time, but testified he had previously been behind and late charges accrued increasing the total outstanding balance on the notes to $97,485.26 as of December 6, 2002. 

Husband also executed a note for $203,000 secured by the parties’ Hilton Head Island home and used $176,457.94 of the loan proceeds to satisfy mortgages on quad lots 3, 4, 5, 6 and 8.  He deposited the remaining amount into his Merrill Lynch securities account.  Husband repaid the entire amount due under the note as of the date of the final hearing. 

Nonmarital property may be transmuted only if it is utilized in support of the marriage, becomes so commingled as to be untraceable, or is utilized in such a manner as to evidence intent to make it marital.  Wyatt v. Wyatt, 293 S.C. 495, 497, 361 S.E.2d 777, 779 (Ct. App. 1987).  None of these requirements exist with regard to Husband’s Hinesville properties.  Husband held the properties solely in his own name, and the income was paid exclusively to him.  The funds utilized by Husband to pay the existing mortgages were acquired in arms-length transactions evidenced by notes and secured by mortgages.  The loan secured by a mortgage on the marital residence had been fully repaid at the time of the final hearing.  Wife’s own testimony was to the effect that she would not have loaned Husband the money to satisfy the existing mortgage had she not received security for her loan.  The evidence is that Husband made regular payments pursuant to the terms of the note.  There is no evidence either party intended at the time of that transaction to transmute the apartments into marital property.  We therefore reverse the portions of the family court’s order holding the apartments have been transmuted and equitably dividing them.  We also reverse the portion of the order requiring sale of the properties and forgiveness of the balance of the debt to Wife secured by the properties.  The estate remains liable for the outstanding balance due on the note.  Because the parties disagree as to the remaining balance, this issue is remanded to the family court to determine the exact amount due.

III.  Alimony

The estate complains of numerous errors in the family court’s order on the subject of alimony.  Most significantly, it asserts the court erred by failing to order alimony payments to cease at Husband’s death.  We agree this omission was error.          

S.C. Code Ann. § 20-3-130 (B)(1) (Supp. 2003) requires that periodic alimony terminate “on the remarriage of the supported spouse or upon the death of either spouse.”  As Husband has died, Wife is not entitled to any further alimony.

IV.  Attorney’s Fees

The estate contends the family court erred by ordering Husband to contribute $20,000 towards Wife’s attorney’s fees.  We disagree.

The estate argues that we should reverse the family court’s award of attorney’s fees to Wife if we conclude Husband is successful in his appeal.  The court will reverse the award of attorney’s fees where the substantive results achieved by a party’s counsel are reversed on appeal.  See, e.g., E.D.M. v. T.A.M., 307 S.C. 471, 477, 415 S.E.2d 812, 816 (1992).  In this case, we affirm a majority of the family court’s order and reverse only as to the transmutation and apportionment of the Hinesville Apartments and require the termination of alimony in accordance with statutory authority.  The remainder of the order accrues to the benefit of Wife.  Accordingly, we find the award of fees to her was proper.

CONCLUSION

We reverse those portions of the family court’s order transmuting and apportioning Husband’s Hinesville apartments, require his estate to satisfy the remaining balance due on the notes on quads 7 and 9, and remand for the court to determine the correct amount.  We also find Wife is no longer entitled to alimony.  We affirm the family court’s order as to the remaining issues.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. 

HUFF and STILWELL, JJ., and CURETON, A.J., concur.


[1]        Husband died during the pendency of this appeal.  His son, Mitchell Foy Dillman, was named personal representative of his estate.

[2]        Prior to the marriage, Husband acquired 7 individual quads (freestanding rental units each containing four apartments) and five townhouses (all located on a single lot) in Hinesville, Georgia.  The quads are identified as lots 3 through 9, and the townhouses are identified collectively as lot 10. 

[3]        Because both parties already had considerable assets they entered into an agreement approximately one month before the marriage stating their intentions that their respective children, rather than one another, should receive their premarital holdings. 

[4]        S.C. Code Ann. § 20-7-472 (Supp. 2003).