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2004-UP-526 - Boland v. Boland

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

Lynn Marie Boland,        Appellant,

v.

John Michael Boland,        Respondent.


Appeal From Horry County
Berry L. Mobley, Family Court Judge


Unpublished Opinion No. 2004-UP-526
Submitted September 15, 2004 – Filed October 18, 2004


AFFIRMED


John R. Ferguson, of Laurens, for Appellant.

John J. Sherrill, of Surfside Beach, for Respondent.

PER CURIAM:  Wife appeals the family court’s order of equitable distribution, arguing the court erred in the identification, valuation, and division of marital property and in failing to award her attorney’s fees.  We affirm. [1]

FACTS

The parties married in 1969.  After separating in 1987, they divided their assets by agreement.  Under the agreement, Wife received the parties’ home in Florida and Husband received a farm they owned in Kentucky. 

The parties reconciled several years later.  After resuming their relationship, Husband created a trust for the purpose of avoiding probate.  The trust named Husband and Wife as the beneficiaries and designated Husband the trustee with extensive powers over the trust assets.  The parties placed vehicles, savings accounts, and other property in the trust.  The parties also signed a deed placing the Kentucky farm Husband received in the separation agreement into the trust.  However, as to the Florida home Wife received in the separation agreement, Husband twice prevented Wife from placing proceeds traceable from the sale of that property into the trust. 

The parties separated again in 2001.  Wife filed for separate maintenance and support and Husband counterclaimed for the same.  Neither party filed for a divorce.  At the hearing, the main issues were the Kentucky farm, the incomes of the parties, and whether Husband should continue health insurance coverage for Wife.  At the end of the hearing, the family court granted each party two weeks to submit proposed orders.  Husband sent his order to the court without sending a copy to Wife, and the court signed the order before the end of the two weeks and before receiving Wife’s proposed order. 

Among other things, the court found the Kentucky farm was not marital property and divided the marital property equally, though it used Husband’s date of hearing valuations for some of his assets rather than his date of separation valuations.  The court also denied Wife’s request for attorney’s fees.  Wife moved for reconsideration, which the court denied. 

STANDARD OF REVIEW

In appeals from the family court, this court may find facts in accordance with its own view of the preponderance of the evidence. Rutherford v. Rutherford, 307 S.C. 199, 204, 414 S.E.2d 157, 160 (1992).  However, this broad scope of review does not require us to disregard the family court’s findings.  Stevenson v. Stevenson, 276 S.C. 475, 477, 279 S.E.2d 616, 617 (1981).  Nor does it require us to ignore the fact that the trial judge, who saw and heard the witnesses, was in a better position to evaluate their credibility and assign comparative weight to their testimony.  Miles v. Miles, 355 S.C. 511, 516, 586 S.E.2d 136, 139 (Ct. App. 2003), cert. denied (June 14, 2004).

LAW/ANALYSIS

I.       Issuance of Final Order

Wife contends the final order should be vacated because the trial court signed Husband’s proposed order prior to receiving and reviewing Wife’s proposed order and because its submission constituted an ex parte communication.  We disagree.

Wife cites several cases for the proposition that a ruling cannot be issued without a party being given the opportunity to be heard by the court in a meaningful way.  See, eg., Universal Benefits, Inc. v. McKinney, 349 S.C. 179, 561 S.E.2d 659 (Ct. App. 2002).  Even though the court ruled without reviewing her proposed order, Wife nevertheless had a meaningful opportunity to be heard.  She had a full hearing to address her claims and offer any evidence she wished to have considered. 

Wife also asserts the ex parte nature of Husband’s proposed order violated Rule 3.5 of the Rules of Professional Conduct, Rule 407, SCACR.  Rule 3.5 states:  “A lawyer shall not . . . [c]ommunicate ex parte with [a judge] except as permitted by law.”  Rule 3.5 was established to prevent any improper influence of judges, jurors or other officials.  Although we do not condone ex parte communication, the transmittal letter and the requested proposed order certainly did not improperly influence the court. 

Moreover, Wife raised these and other arguments in her motion to reconsider, which the court denied after review.  For the reasons discussed, we find no basis for vacating the family court’s final order.

II.      Kentucky Property

Wife contends the trial court erred in failing to include the Kentucky property in the marital estate.  We disagree.

The South Carolina Code defines marital property, which is subject to equitable distribution, as “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).  The statute also provides certain exceptions, including “property excluded by written contract of the parties.”  § 20-7-473(4). 

Nonmarital property may be transmuted into marital property if it (1) becomes so commingled with marital property as to be untraceable, (2) is jointly titled, or (3) is utilized by the parties in support of the marriage or in some other manner so as to evidence the parties’ intent to make it marital property.  Pool v. Pool, 321 S.C. 84, 88, 467 S.E.2d 753, 756 (Ct. App. 1996), aff’d as modified, 329 S.C. 324, 494 S.E.2d 820 (1998).  “Transmutation is a matter of intent to be gleaned from the facts of each case.”  Id.  The spouse claiming transmutation must produce objective evidence showing that during the marriage the parties themselves regarded the property as the common property of the marriage.  Id.

Husband became the sole owner of the Kentucky property by way of the 1987 separation agreement.  Wife does not dispute this, but contends their subsequent reconciliation abrogated the agreement or that the property was transmuted when it was placed into the family trust.

The parties’ reconciliation did not abrogate the property settlement the parties reached in their 1987 separation.  An inherently executory provision of a separation agreement, such as one for future support, is abrogated by a reconciliation.  Bourne v. Bourne, 336 S.C. 642, 645-46, 521 S.E.2d 519, 521 (Ct. App. 1999).  However, any executed property settlement provisions are unaffected by a subsequent reconciliation, except to the extent the property has increased in value because of the parties’ joint efforts.  Id.  Because the parties executed the property division provided for in the 1987 separation agreement, the property settlement was not affected by their reconciliation.

Additionally, the evidence does not support Wife’s claim of transmutation.  Although the Kentucky property was placed in the trust with marital property, it never became untraceable.  Furthermore, the property never generated any real income used to support the family or to pay debts of the parties.  Although the trust gave Wife the authority to control the property, she admitted Husband controlled the trust’s assets.  Both parties testified it was Husband’s idea to create the trust, and he testified the main purpose was to avoid probate in the event of his death.  Finally, even though Husband had Wife sign a deed to transfer the Kentucky property to the trust, that deed was ineffective because Wife had executed a quitclaim deed as a result of the 1987 separation agreement.  See Graniteville Co. v. Williams, 209 S.C. 112, 120, 39 S.E.2d 202, 206 (1946) (finding deed signed by party without claim to title of property was ineffective).  Because we find Wife failed to produce objective evidence the parties treated the farm as their common property, we find the family court properly excluded it from the marital estate.

III.    Inclusion or Exclusion of Other Property

Wife contends the family court improperly included her income, clothing, and jewelry without also including the full amount of Husband’s income, clothing, and jewelry.  Wife also contends Husband improperly sold bonds despite being enjoined from disposing of assets.  We disagree.

Husband testified the value he listed for his furnishings also included his clothing and jewelry.  Although he was only awarded $1,000 in furnishings, and Wife’s valuation of Husband’s clothing and jewelry totaled $1,500, we cannot say the court abused its discretion, nor did the failure to specifically delineate the clothes and jewelry lead to an unfair award. 

Wife contends the trial court erred in failing to properly include income earned by Husband or in including her income at a gross value and his at its net value.  Additionally, she asserts his gambling winnings should be added to the equitable distribution.  We disagree.

The parties’ incomes post-filing should not have been included for purposes of equitable distribution.  See S.C. Code Ann. § 20-7-473 (Supp. 2003) (providing “term ‘marital property’ as used in this article means 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”).  Although Wife is correct that her income was improperly included in the marital estate, Husband’s income from the date of filing until the date of the order was also improperly included.  As Wife’s income was included at approximately $11,000 and Husband’s was included at approximately $65,000, any error benefited Wife and she is thus entitled to no relief.  

The evidence in the record is inconclusive as to when the gambling winnings occurred.  However, there is no evidence in the record that any sum existed at the time of filing.  If the winnings occurred after filing, they constitute earnings and are not subject to equitable distribution.  For either reason, the trial court properly excluded gambling proceeds from equitable distribution.

As for the bonds, they were redeemed by the issuer and Husband had no way to prevent their redemption.  Additionally, Wife did not establish that either the bonds or their proceeds were marital property subject to division. 

IV.    Valuation of Marital Estate

Wife asserts the family court improperly valued the property in the marital estate.  She maintains Husband’s IRA and investment accounts were valued at the time of the hearing and not at the time of separation as required.  She asserts it was error for the trial court to value his property at the time of the hearing and her property at the time of separation.  We affirm the value assigned by the family court.

As stated above, “marital property” 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.  Thus, for purposes of equitable distribution, the value of marital property is the value of the property at the time of the commencement of the marital litigation.  See Mallett v. Mallett, 323 S.C. 141, 151, 473 S.E.2d 804, 810 (Ct. App. 1996) (“Marital property is valued as of the date of the filing of the complaint.”).  However, where necessary to avoid an unfair apportionment caused by significant changes in the valuation of marital property during marital litigation, the court may “consider the post-filing appreciation or depreciation when valuing and apportioning the marital estate.”  Dixon v. Dixon, 334 S.C. 222, 228, 512 S.E.2d 539, 542 (Ct. App. 1999).

Here, Husband provided the court with updated values of his investment accounts due to the recent market decline.  The reduction in value was not caused by an intentional depletion of assets or any fault of Husband.  The accounts declined along with the market, and Husband should not be penalized for the measurable decline.  Accordingly, the court did not err in using the updated values of Husband’s accounts.  Because Wife failed to provide updated values of her accounts, it is impossible to determine whether any change in her accounts occurred. 

V.      Apportionment of Marital Estate

Wife also challenges the court’s division of the marital estate.  She asserts the equitable distribution should be adjusted because Husband retained the Kentucky farm as non-marital property.  She also asserts Husband improperly elected to receive higher pension payments during his life rather than lower lifetime payments that would continue after his death.  We find the court’s apportionment fair and proper.

The apportionment of marital property is within the family court’s sound discretion.  Morris v. Morris, 295 S.C. 37, 39, 367 S.E.2d 24, 25 (1988).  Section 20-7-472 of the South Carolina Code enumerates fifteen factors applicable to a determination of equitable distribution.  The statute vests the family court with discretion to decide what weight should be assigned to the various factors.  S.C. Code Ann. § 20-7-472 (Supp. 2003).  On review, this court looks to the fairness of the overall apportionment, and if the end result is equitable, the fact this court might have weighed specific factors differently than the family court is irrelevant.  Johnson v. Johnson, 296 S.C. 289, 300-01, 372 S.E.2d 107, 113 (Ct. App. 1988).  This court will affirm the family court’s apportionment of marital property where the court addressed the factors with enough sufficiency for us to conclude the family court was cognizant of the statutory factors.  Doe v. Doe, 324 S.C. 492, 502, 478 S.E.2d 854, 859 (Ct. App. 1996).

Both parties sought an equal division of the marital property.  Wife knew the status of the Kentucky property was an issue before the court and still argued for an equal division of the marital assets.  The court stated that after “reflecting upon all the factors set forth within Section 20-7-472 . . . that the intention, and thus agreement, of both parties to divide all marital property on a 50/50 basis should be accepted.”  Accordingly, we find the trial court properly considered the factors and the testimony of the parties.  We find the equal division of the marital assets a fair result and thus not an abuse of discretion.  Nor do we find Husband’s pension election—a joint decision made by the parties while they were married and before commencement of this action—a basis for adjusting the overall award. 

VI.    Attorney’s Fees

Wife asserts the family court erred in failing to award her attorney’s fees.  We do not agree.

The decision whether to award attorney’s fees is a matter within the family court’s sound discretion.  Stevenson v. Stevenson, 295 S.C. 412, 415, 368 S.E.2d 901, 903 (1988).  In determining whether to award attorney’s fees, the court should consider the parties’ ability to pay their own fees, the beneficial results obtained by the attorney, the parties’ respective financial conditions, and the effect of the fee on each party’s standard of living.  E.D.M. v. T.A.M., 307 S.C. 471, 476-77, 415 S.E.2d 812, 816 (1992).

The family court properly considered the appropriate factors and concluded neither party was entitled to recover attorney’s fees.  Although the family court may have improperly imputed the ability to continue to earn income to the Wife, it is undisputed her income will be similar to Husband’s, as they will divide his pension equally.  Additionally, the results obtained were not more beneficial to one party than the other, and both parties received the same amount of marital assets from which to pay their fees.  Finally, the award of attorney’s fees will impact each party’s standard of living in roughly the same manner.  Accordingly, we hold the trial court did not abuse its discretion in denying attorney’s fees to Wife.

AFFIRMED.

STILWELL, BEATTY, and SHORT, JJ., concur.


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