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2008-UP-267 - Cline v. Cline

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


Melissa Burrell Cline, Appellant,

v.

Thomas A. Cline, Respondent.


Appeal From Greenville County
 Leslie K. Riddle, Family Court Judge


Unpublished Opinion No. 2008-UP-267
Heard April 9, 2008 – Filed May 16, 2008


AFFIRMED


O.W. Bannister, of Greenville, for Appellant.

David Michael Collins, Jr., of Spartanburg, for Respondent.

PER CURIAM:  In this domestic action, Melissa Burrell Cline (Wife) appeals the findings of the family court arguing: (1) the court erred in holding repayment of marital debt did not include interest; (2) the court erred in finding 1.1 acres of nonmarital property had been transmuted into marital property; and (3) the court abused its discretion in denying Wife alimony.  We affirm.

FACTS

Wife and Thomas A. Cline (Husband) began dating when Wife was in the eighth grade.  After graduating high school, Wife and Husband married on April 24, 1993.  Wife and Husband have two children who were respectively nine years old and four years old at the time of the final hearing.

In anticipation of marriage, Wife and Husband purchased a mobile home which they placed on land given to Wife by her grandfather.   Husband assisted the grandfather in selecting, clearing, and preparing the land in order to place the mobile home.  The couple named the road used to access the land “T&M Cline Drive,” otherwise known as “Tommy and Melissa Cline Drive.”  Additionally, the land was used as collateral to secure the loan for the mobile home.  During the course of their marriage, Wife and Husband fully paid for the mobile home and continued to make improvements to the land. 

Due to poor financial history, Husband and Wife were unable to obtain loans from a bank. As a result, they borrowed money from Linda Bradley, Wife’s mother, throughout the marriage.  Although no signed documents indicate any loans or a promise to repay the debt, neither Husband nor Wife dispute receiving loans from Bradley.[1]  Instead, the parties dispute the amount owed.  According to Wife, each time a loan was received from Bradley, Bradley would establish a payment schedule with interest.  However, Husband was unaware of any payment schedule or the accrual of interest because Wife, using marital funds, handled the payments. 

Prior to having children, Wife worked full-time making ten dollars an hour.  Following the birth of their first child, Wife continued to work on a part-time basis.  After the birth of their second child, Wife left work to care for her children.  At some point during the marriage, Wife attended technical college for one and one-half years, but at the final hearing she claimed going back to school was not an option.  According to Husband, Wife refused to work outside of the home.  At the time of the hearing, in addition to watching her own children, Wife provided day care services for four additional children at the rate of $20.00 to $25.00 per day.  Husband, who at the time of the hearing was on short-term disability, has been employed by BMW since 1999 and makes a base pay of $25.15 per hour. 

During the course of their marriage, Husband and Wife separated on three occasions as a result of Husband’s extramarital affair with another woman.  The final separation occurred on February 2, 2005.  On May 24, 2005, Wife filed for divorce on the grounds of adultery and on September 19, 2006, the family court issued its final order and decree of divorce awarding full custody of the children to Wife.  For the purpose of determining child support, the family court imputed the sum of $8.00 per hour to Wife, which equates to a gross monthly income of $1,386.00.  Husband’s gross monthly income was calculated at $3,266.00, which was reflective of his disability pay.  Husband was ordered to pay child support of $1,121.00 per month.  Wife was awarded full ownership and possession of the marital home but did not receive an alimony award.  The family court found the land on which the marital home sits had been transmuted into marital property.  This appeal followed.

STANDARD OF REVIEW

“In appeals from the family court, the appellate court has the authority to find the facts in accordance with its own view of the preponderance of the evidence.”  Ex parte Morris, 367 S.C. 56, 61, 624 S.E.2d 649, 652 (2006). However, this broad scope of review does not require the appellate court to disregard the findings of the family court.  Wooten v. Wooten, 364 S.C. 532, 540, 615 S.E.2d 98, 102 (2005).  Neither is the appellate court required to ignore the fact that the family court judge, who saw and heard the witnesses, was in a better position to evaluate their credibility and to assign comparative weight to their testimony.  Latimer v. Farmer, 360 S.C. 375, 380, 602 S.E.2d 32, 34 (2004).  “Questions concerning alimony rest with the sound discretion of the [family] court, whose conclusions will not be disturbed absent a showing of abuse of discretion.”  Kelley v. Kelley, 324 S.C. 481, 485, 477 S.E.2d 727, 729 (Ct. App. 1996).  The family court “abuses its discretion when factual findings are without evidentiary support or a ruling is based upon an error of law.”  Smith v. Doe, 366 S.C. 469, 474, 623 S.E.2d 370, 372 (2005). 

LAW/ANALYSIS

I.  Marital Debt

Wife argues the family court erred in its calculation of marital debt because Husband and Wife were expected to repay the principal owed to Bradley with interest.  We disagree.

Debts incurred for marital purposes are subject to equitable distribution.  S.C. Code Ann. § 20-7-472(13) (Supp. 2006).  “Section 20-7-472 creates a rebuttable presumption that a debt of either spouse incurred prior to marital litigation is a marital debt and must be factored into the totality of equitable apportionment.”  Jenkins v. Jenkins, 345 S.C. 88, 103, 545 S.E.2d 531, 539 (Ct. App. 2001).  Additionally, loans from close family members must be carefully scrutinized for legitimacy.  Id. at 104, 545 S.E.2d at 539. 

Our review of the record suggests that Bradley gave Husband and Wife approximately $41,000 with the expectation that she would be repaid.  Husband, Wife, and Bradley testified that Bradley made loans to the parties throughout the marriage.  Husband and Wife presented testimony that between $20,000 and $31,000 had been paid back to Bradley.  Both Bradley and Wife stated the loans were interest bearing.  However, neither Wife nor Bradley introduced into evidence a promissory note or any other document as proof the payment was an interest bearing loan.  Instead, the record reveals the only document indicating a payment schedule, including a 7.5% interest rate, was created right before the scheduled trial.  Accordingly, the family court did not abuse its discretion in excluding interest when calculating the remaining balance of the marital debt only for the purposes of equitable distribution.[2]

II.  Transmutation

Wife asserts the family court erred in finding the 1.1 acres of land, a premarital gift, was transmuted into marital property.  We disagree.

Property acquired by either party before the marriage is nonmarital property. S.C. Code Ann. § 20-7-473(2) (Supp. 2006).  While not ordinarily subject to division, a gift of real estate to one spouse may lose its nonmarital character if used in support of the marriage or otherwise utilized in such a manner as to evidence intent by the parties to make it marital property. Trimnal v. Trimnal, 287 S.C. 495, 497-98, 339 S.E.2d 869, 870 (1986).  Property that is nonmarital at the time of its acquisition may be transmuted if it: (1) becomes so commingled with marital property as to be untraceable; (2) is titled jointly; or (3) is utilized by the parties in support of the marriage or in some other manner so as to evidence an intent by the parties to make it marital property.  Id.

“As a general rule, transmutation is a matter of intent to be gleaned from the facts of each case.  Johnson v. Johnson, 296 S.C. 289, 295, 372 S.E.2d 107, 110 (Ct. App. 1988).  “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. at 295, 372 S.E.2d at 110-11.  If one spouse carries this burden, that spouse establishes a prima facie case the property is marital property.  Id. at 295, 372 S.E.2d at 110.  If the opposing spouse then wishes to claim that the property so identified is not part of the marital estate, the opposing spouse has the burden of presenting evidence to establish its nonmarital character.  Id.

Evidence that nonmarital property has been transmuted may include “placing the property in joint names, transferring the property to the other spouse as a gift, using the property exclusively for marital purposes, commingling the property with marital property, using marital funds to build equity in the property, or exchanging the property for marital property.”  Id. at 295, 372 S.E.2d at 111.  However, the mere use of separate property to support the marriage, without some additional evidence of intent to treat it as property of the marriage, is not sufficient to establish transmutation.  Id. at 295-96, 372 S.E.2d at 111. 

South Carolina courts have found sufficient evidence to establish transmutation where separate property is used to support the marital home.  Recently our court held land acquired by husband by gift lost its nonmarital character when husband and wife erected the marital home on the land.  Simpson v. Simpson, Op. No. 4341 (S.C. Ct. App. filed Feb. 8, 2008) (Shearouse Adv. Sh. No. 7 at 71) (citing Cooper v. Cooper, 289 S.C. 377, 380, 346 S.E.2d 326, 328 (Ct. App. 1986)).  In Simpson, husband acquired land by gift during the marriage.  Thereafter, husband and wife cleared the land and used marital funds to build a home, which the parties then occupied from the time it was built in 1995 until the commencement of their divorce proceeding in 2004.  Id.  Based on these occurrences, this court found the parties used the home and land in support of the marriage and upheld the family court’s ruling that the home was transmuted into marital property.  Id.  Similarly, in Cooper, this court held husband’s nonmarital property was effectively transmuted into marital property when the marital home was erected thereon.  Cooper, 289 S.C. at 380, 346 S.E.2d at 328.  In finding Husband’s nonmarital property transmuted into marital property, the Cooper court reasoned:

[a]lthough the evidence shows that the husband acquired the land by gift from his father during the marriage, it also shows, and we so find, that the property lost its nonmarital character and therefore became subject to equitable distribution when the husband, nine years before the parties separated, erected the marital home thereon and thereby used the 1.4 acre tract in support of the marriage. 

Id.   Here, as in Simpson and Cooper, the land given to Wife by gift effectively lost its nonmarital character when it was used to support the marriage.  Applying this court’s analysis in Simpson and Cooper, the use of Wife’s nonmarital land as the foundation to sustain the marital mobile home for the duration of Husband and Wife’s marriage supports the family court’s finding of transmutation. 

Moreover, the facts further evidence the intent of the parties to treat the property as marital property. Husband assisted in selecting, clearing, and preparing the land for the mobile home and the land was used as collateral to secure the loan to enable the purchase of the marital mobile home.  Husband and Wife, using marital funds, improved the property by installation of a sewer and septic tank, addition of electricity and water, and pavement of the driveway.[3]  The couple even named the road used to access the land under the couple’s married name, calling it “T&M Cline Drive.”  These actions, in combination, evidence intent by the parties to make the land marital property.  As a result, the family court did not abuse its discretion in finding the land was transmuted into marital property.

III.  Alimony

Wife contends the family court abused its discretion in denying her request for alimony.  Specifically, Wife asserts the family court’s denial of alimony was erroneously based on the premise that child support is a substitute for alimony and the court’s decision was incorrect due to error as to the other grounds of this appeal.  We disagree.

An award of alimony rests within the sound discretion of the trial court and will not be disturbed on appeal absent an abuse of discretion.  Allen v. Allen, 347 S.C. 177, 184-85, 554 S.E.2d 421, 424-25 (Ct. App. 2001).  An abuse of discretion occurs when the findings of the family court either lack evidentiary support or are controlled by an error of law.  Bryson v. Bryson, 347 S.C. 221, 224, 553 S.E.2d 493, 495 (Ct. App. 2001).

“Alimony is a substitute for the support which is normally incident to the marital relationship.” Johnson v. Johnson, 296 S.C. 289, 300, 372 S.E.2d 107, 113 (Ct. App. 1988).  As such, alimony serves as a means of placing the supported spouse in a position as near as possible to the position he or she enjoyed during the marriage.  Id.  “However, ‘[a]limony should not dissuade a spouse, to the extent possible, from becoming self-supporting.’”  Davis v. Davis, 372 S.C. 64, 79, 641 S.E.2d 446, 453-54 (Ct. App. 2006) (quoting Rimer v. Rimer, 361 S.C. 521, 525, 605 S.E.2d 572, 574 (Ct. App. 2004)).  The ultimate alimony award, while based upon the reasonable needs of the wife, “should not serve as a disincentive for her to make reasonable efforts to improve her employment potential or dissuade her, to the extent feasible, from becoming self-supporting.”  Josey v. Josey, 291 S.C. 26, 33, 351 S.E.2d 891, 896 (Ct. App. 1986).  “It is the duty of the family court to make an alimony award that is fit, equitable, and just if the claim is well founded.”  Allen, 347 S.C. at 184, 554 S.E.2d at 424 (citing Woodward v. Woodward, 294 S.C. 210, 217, 363 S.E.2d 413, 417 (Ct. App. 1987)).

South Carolina law provides the family court may grant alimony in such amounts and for such term as the judge considers appropriate under the circumstances.  Smith v. Smith, 327 S.C. 448, 462, 486 S.E.2d 516, 523 (Ct. App. 1997).  Factors to be considered in making an alimony award include: (1) duration of the marriage; (2) physical and emotional health of the parties; (3) educational background of the parties; (4) employment history and earning potential of the parties; (5) standard of living established during the marriage; (6) current and reasonably anticipated earnings of the parties; (7) current and reasonably anticipated expenses of the parties; (8) marital and nonmarital properties of the parties; (9) custody of children; (10) marital misconduct or fault; (11) tax consequences; and (12) prior support obligations; as well as (13) other factors the court considers relevant. S.C. Code Ann. § 20-3-130(C) (Supp. 2007).  Additionally, the amount received as a result of equitable distribution is also a factor to be considered in awarding alimony.  Josey, 291 S.C. at 33, 351 S.E.2d at 895-96.  The weight accorded to each factor is within the family court’s sound discretion.  S.C. Code Ann. § 20-3-130(C) (Supp. 2007).  The family court has discretion to determine the amount of any alimony award.  S.C. Code Ann. § 20-3-230(B)(1) (Supp. 2007). 

Where alimony is appropriate, South Carolina favors permanent periodic alimony over other statutory forms of alimony.  Jenkins v. Jenkins, 345 S.C. 88, 95, 545 S.E.2d 531, 535 (Ct. App. 2001).  Despite this preference, however, South Carolina recognizes rehabilitative alimony as an alternative in special circumstances.  “Rehabilitative alimony may be awarded only upon a showing of special circumstances justifying a departure from the normal preference for permanent periodic support.”  Jenkins, 345 S.C. at 95, 545 S.E.2d at 535.  The purpose of rehabilitative alimony is to further the ability of a dependant spouse to become self-supporting following a divorce.  Id.

In the present case, the family court considered all of the pertinent statutory factors including the duration of the marriage and Husband’s conduct in determining whether to make an award of alimony.  Upon weighing the necessary factors as well as the equitable distribution award, the family court found that permanent periodic alimony was not appropriate in this case. 

Additionally, the court did not specifically find the need for rehabilitative alimony.  Instead, the court evaluated whether rehabilitative alimony, in a best case scenario, would be beneficial to Wife.  After reviewing the numbers and upon consideration of the tax consequences, the family court concluded that Wife was better off financially without an award of alimony.  While we would not condone the substitution of child support for alimony, we do not reach this question as we do not interpret the court’s best case scenario as being tantamount to a finding to award rehabilitative alimony.  Accordingly, the court’s alternative reasoning is merely dicta and is not dispositive of this appeal.  We interpret the court’s decision as denying any form of alimony after consideration of the various factors and record, especially in light of Wife’s age, education, employment history, and ability to work.  In her brief on appeal, Wife only claims that she is entitled to permanent periodic alimony.  Since Wife bases her alimony argument on the alleged errors of the court on the other grounds of appeal, as well as the court’s alleged error in that portion we find to be dicta, we find no abuse of discretion by the family court.  We further note that the court was never presented with any request, by virtue of the pleadings, or at trial, to award rehabilitative alimony. Thus, we find no abuse of discretion in the family court’s decision to deny Wife alimony.  

CONCLUSION

Based on the foregoing, the decision of the family court is

AFFIRMED.

HEARN, C.J., PIEPER, J., and GOOLSBY, A.J., concur.


[1] According to Bradley, Husband and Wife borrowed approximately $41,000 and have paid back over $33,000. 

[2] Bradley is not a party to this litigation.  Our ruling on this issue is limited solely to the court’s equitable distribution analysis.  We express no opinion on Bradley’s right to assert a claim against Husband or Wife.

[3] Wife asserts all of these acts, except pavement of the driveway, occurred before marriage and suggests the property is thus nonmarital.  However, the court is not limited solely to acts occurring during marriage in its determination of the intent of the parties.