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2010-UP-377 - Cauble v. Cauble

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Rae Ann Valentine Cauble, Respondent,

v.

Winston Reid Cauble, Appellant.


Appeal From Darlington County
James A. Spruill, III, Family Court Judge


Unpublished Opinion No. 2010-UP-377
Submitted June 1, 2010 – Filed July 28, 2010


AFFIRMED


Rob F. Gardner and J. Anthony Floyd, of Hartsville, for Appellant.

Nancy H. Bailey, of Florence, for Respondent.

PER CURIAM:  This is an appeal of a divorce decree.  Winston Reid Cauble (Husband) alleges the family court erred in (1) awarding Rae Ann Valentine Cauble (Wife) an equitable interest in the proceeds obtained from the sale of a home that Husband inherited from his mother, (2) awarding Wife an equitable interest in a portion of a business allegedly owned by a third party, (3) requiring Husband to pay one-half of the expenses incurred by Wife in hiring an accountant for this lawsuit, and (4) refusing to give Husband credit for funds he claimed to have paid for Wife and the parties' minor child while this matter was pending.  We affirm.[1]

The parties married in 1980 and separated in December 2005.  They have one son, who was born in 1989.  During the marriage, they acquired ownership interests in two businesses.  The first business, W&A Associates, was a mobile home dealership that, as of the time this lawsuit was filed, was in Wife's name.  After the parties separated but before this action was filed, Husband had Wife place funds from the sale of his deceased mother's home into a bank account that was in the name of W&A Associates.  The other business, M&R Development, was a corporation dealing in modular homes and land sales.  Husband purportedly owned fifty-one percent of the stock of M&R Development, and a third party, Marcus Tanner, was reflected on corporate records as the owner of the remaining forty-nine percent. 

While this action was pending in the family court, Husband continued to pay his own bills and numerous expenses for the parties' child, including private school tuition and contributions to a capital campaign building fund, from business accounts.  Also during that time, Husband made payments on Wife's vehicle and, according to him, paid $22,000 from an account owned by M&R Development to settle a lawsuit.

In the final decree, the family court granted the parties a divorce on the ground of a one-year separation.  The court found it did not need to resolve any issues regarding the parties' child, who was nearly eighteen and would be graduating from high school.  The court noted (1) the child lived primarily with Wife and visited Husband on a regular basis and (2) Husband agreed to continue paying for the child's health and automobile insurance.  As to the marital property, the court found the parties were entitled to a fifty-fifty division.  To effect the distribution, the court identified various marital assets, which it awarded to Wife, including a cash payment of $132,277.  The family court also ordered Husband to pay half of the fee charged by a forensic accountant hired by Wife for the case.  Pursuant to Husband's motion to alter or amend, the family court made minor corrections to the decree and added language for purposes of clarification, but denied further relief to Husband.  Husband then filed this appeal.

1.  Husband first claims the family court erred in awarding Wife fifty percent of the proceeds from the sale of the home that he inherited from his mother, noting (1) the home was titled solely in his name from the time he inherited it, which preceded the birth of the parties' child, and (2) there was no debt service associated with the home during the parties' marriage, and (3) the funds remained traceable.  We find no error.

Husband is correct that inherited property is nonmarital.  S.C. Code Ann. § 20-3-630(A)(1) (Supp. 2009).  We also agree with him that the proceeds from the sale of his mother's home are likewise prima facie nonmarital because they constitute "property acquired . . . in exchange for [inherited property]."  Id. § 20-3-630(A)(3).  The family court, however, placed great emphasis on the fact that instead of putting the sales proceeds into an account in his own name, Husband had Wife place the funds into a bank account that was in the name of W&A, a corporation in which she was the sole record owner.  The court likewise found that "by doing this, the Husband made this marital property and . . . should not be given additional credit."  The court further found Husband took these steps to obtain a tax advantage and concluded that "[i]f it should be honored by the IRS, it should likewise be recognized by this Court."  Husband does not challenge this reasoning in his brief.  Moreover, even the absence of any commingling is not dispositive of the question of whether a nonmarital asset has been transmuted into marital property.  See Peterkin v. Peterkin, 293 S.C. 311, 312, 360 S.E.2d 311, 312 (1987) (recognizing that property inherited by a spouse may become transmuted into marital property); Hussey v. Hussey, 280 S.C. 418, 423, 312 S.E.2d 267, 270-71 (Ct. App. 1984) (stating the nonmarital character of inherited property may be lost and the property may become subject to equitable division "when the property becomes so commingled as to be untraceable; is utilized by the parties in support of the marriage; or is titled jointly or otherwise utilized in such manner as to evidence an intent by the parties to make it marital property") (emphasis added).

2.  The family court found the bank accounts in the name of M&R Development were marital property and divided them equally between Husband and Wife.  In contrast, the court found half of the real estate belonging to M&R Development was actually owned by Marcus Tanner.  Husband takes issue with the inclusion of the bank accounts in the marital estate, arguing the family court should not have divided them between the parties without making Tanner a party to the action.  We disagree.

In Sexton v. Sexton, 298 S.C. 359, 361-62, 380 S.E.2d 832, 834 (1989), the South Carolina Supreme Court held that "when property is alleged to be marital property, but is owned by a third party, the Family Court has the subject matter jurisdiction to join all persons with a possible interest in the property as parties to the action and to determine if the property constitutes marital property as defined in  § 20-7-473 [now § 20-3-630]."  Here, however, Tanner's ownership interest in the business was not immediately apparent.  First, the tax returns of M&R Development, which were proffered by Wife, showed Husband owned one hundred percent of the stock of the corporation.  Furthermore, during discovery, Husband failed to produce the corporate records supporting his assertion about Tanner's ownership interest; rather, he offered them over Wife's objection when the trial was already underway.  In addition, Husband does not take issue with the family court's finding that he transferred money back and forth between accounts held by both family businesses as well as his personal accounts, essentially treating the business as solely his own.  Finally, Husband himself could have moved to make Tanner a party to the action or called him as a witness, but never attempted to do either of these.  Under these circumstances, we are reluctant to disturb the family court's decision to treat the accounts of M&R Development as marital property.  See Shearer v. DeShon, 240 S.C. 472, 484, 126 S.E.2d 514, 520 (1962) ("Ordinarily, one cannot complain of an error which his own conduct has induced.").

3.  The family court declined to award attorney's fees to either party; however, it ordered Husband to pay one-half of the fees Wife incurred for the services of a forensic accountant whom she had hired for this action.  Husband argues this directive should be reversed because (1) it was inconsistent with the family court's refusal to award attorney's fees to either party, and (2) the family court failed to make any specific findings that would justify holding him jointly responsible for this expense.  We disagree.

The same equitable considerations that apply to attorney's fees also apply to costs, i.e., such awards are within the sound discretion of the family court.  Doe v. Doe, 370 S.C. 206, 220, 634 S.E.2d 51, 59 (Ct. App. 2006); Wood v. Wood, 298 S.C. 30, 33, 378 S.E.2d 59, 61 (Ct. App. 1989).  Even if the family court's findings of fact on an issue are insufficient, this Court may make its own findings according to the preponderance of the evidence if the record is sufficient.  Bowers v. Bowers, 349 S.C. 85, 98-99, 561 S.E.2d 610, 617 (Ct. App. 2002).

Husband himself acknowledged in his brief that the court noted "the accountant partially benefitted the Husband in that she compiled and organized information that assisted the Court in making the division."  He does not challenge the court's finding that the complicated nature of the case warranted the assistance of an accountant to calculate the valuations and did not hire his own accountant for this purpose.  The family court also noted Husband was at times uncooperative in furnishing information in a timely manner, making valuations more difficult than necessary.  Under these circumstances, we find no abuse of discretion in ordering Husband to pay one-half of the forensic accountant's fees.

4.  Finally, Husband argues the family court erred in not giving him credit for funds he paid for the benefit of Wife and the parties' child while the matter was pending in the family court.  He contends each payment was made from the marital estate after the initiation of the action and should have been reflected in the equitable division of the marital property.  It is his position that the payments he made on behalf of the parties' child should have been evenly divided between the parties, giving him an offset for one-half of the corresponding amounts.  He further contends he is entitled to an offset of the entire amount of any vehicle payments he made on Wife's behalf after the commencement of this action.  Finally, he maintains that $22,000 allegedly paid from an M&R Development account to settle a lawsuit should have been deducted from the total marital estate.  We reject these arguments.

First, the expenses on behalf of the parties' child were paid from marital funds; furthermore, Husband did not pay regular child support.  We therefore agree with the family court's decision to consider these payments to be voluntary contributions by Husband for the support of the child.  See S.C. Code Ann. § 20-3-620(B)(14) (Supp. 2009) (including "child custody arrangements and obligations at the time of the entry of the order" as factors in equitable apportionment decisions); King v. King, 384 S.C. 134, 143, 681 S.E.2d 609, 614 (Ct. App. 2009) ("The appellate court looks to the overall fairness of the apportionment.").  Second, Husband paid his own personal expenses as well as Wife's vehicle payments from marital funds; therefore, under his reasoning, if he is entitled to a credit for her expenses, she would be entitled to a credit on his expenses.  Finally, Wife acknowledged only that she had some nonspecific knowledge about a lawsuit; and, as the family court explained in its order on reconsideration, Husband produced no documentation about the alleged settlement or its terms.  We therefore find no reason to reverse the family court's refusal to make the requested adjustments.  See Wooten v. Wooten, 364 S.C. 532, 542, 615 S.E.2d 98, 103 (2005) ("The apportionment of marital property is within the discretion of the family court and will not be disturbed on appeal absent an abuse of discretion.").

AFFIRMED.

FEW, C.J., THOMAS and PIEPER, JJ., concur.


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