Shewbart v. Shewbart

Decision Date27 March 2009
Docket Number2071102.
PartiesBeverly Renee SHEWBART v. John Michael SHEWBART.
CourtAlabama Court of Civil Appeals

Gary L. Jester of Jester & Jenkins, Florence, for appellant.

Eddie Beason of McDowell, Beason & Hamilton, P.C., Russellville, for appellee.

MOORE, Judge.

Beverly Renee Shewbart ("the wife") appeals from a judgment divorcing her from John Michael Shewbart ("the husband"). We affirm in part, reverse in part, and remand.

Procedural Background

After a 16-year marriage, the parties separated in December 2006, and, on January 11, 2007, the husband filed a complaint for a divorce. On June 27, 2008, the trial court conducted an ore tenus hearing. On July 10, 2008, the trial court entered a "Final Decree of Divorce." In that judgment, the trial court awarded the parties joint legal and joint physical custody of their 17-year-old daughter, made no award of child support, divided the marital estate, and made no award of alimony. The wife appealed.

Factual Background

The evidence introduced at the trial established the following. The husband and the wife married in May 1990. At that time, both the husband and the wife worked full-time. The wife and her son from a prior marriage moved into a mobile home owned by the husband that was located on 3.5 acres of land owned by the husband.

Within a few months, the wife became pregnant with the parties' daughter. The wife testified that, during that pregnancy, she stopped working because of medical complications caused by high blood pressure. While the wife was still pregnant, the parties purchased a house ("the marital residence") for $35,000; the wife was still living in that house at the time of the trial. After giving birth to the daughter on April 17, 1991, the wife did not accept full-time employment again but served primarily as a full-time mother and housewife.

At some point in the mid-1990s, the husband started a restaurant and catering business known as "Swamp John's" in Red Bay. The wife was involved, but assisted to only a limited degree, in starting that business. Although the husband was still employed elsewhere when he started Swamp John's, he eventually lost his main job as the result of a layoff, and, thereafter, he devoted his full-time energies to Swamp John's.

By 2002, the parties had fully paid for the marital residence. The husband obtained a line of credit in May of that year using the marital residence as collateral. On the application for the line of credit, the husband estimated the value of Swamp John's as $300,000 and indicated that he received $4,500 per month in wages or salary from the business. At the time of the trial, the line of credit had a balance of $74,681.

During the course of the marriage, the wife developed various medical conditions, including herniated disks in her neck and back, chronic back pain and permanent nerve damage, high blood pressure, a thyroid condition, bipolar disorder, abnormal heart beat, attention deficit disorder, ulcer and stomach problems, and sleep problems. The wife took multiple medications for those conditions. The wife testified that she could not work because of her medical conditions.1 The husband testified that he did not know what bipolar disorder was, but he complained that the wife had extreme mood swings. The husband characterized the wife as a hypochondriac and testified that she exaggerated her medical conditions. The husband stated that he believed the wife could work and support herself.

The husband testified that, in December 2006, the wife cursed at him and at the parties' daughter, who was then 15 years old. The husband and the daughter then moved out of the marital residence, and, shortly thereafter, the husband filed for a divorce. The wife denied cursing at the daughter and claimed that the husband had somehow convinced the daughter to leave with him. At the time of the trial, the husband was living in a shop located "on the line" between property owned jointly by the husband and his father and property owned by the husband's parents. The husband's father had added two bedrooms and a kitchen to the shop to make it livable for the husband and the parties' daughter. The husband did not financially contribute to the costs incurred to modify the shop, and he was not paying rent to live in the shop. By the time of the trial, the daughter had turned 17 years old and was residing 3 nights a week with the husband in the shop and 4 nights a week with the wife in the marital residence. The husband admitted that the wife and the daughter had a close relationship.

By the time of the trial, the husband's business interests had expanded. The husband was operating the original location of Swamp John's in Red Bay as a sole proprietorship under the name "John Shewbart d/b/a Swamp John's Restaurant & Catering." The husband and four other shareholders incorporated Swamp John's, Inc., to operate a franchise located in Muscle Shoals and Swamp John's of Huntsville, Inc., to operate a franchise located in Huntsville.2 Additionally, the husband and those same shareholders became members in Swamp John's Intellectual Property, LLC, which they created to license the use of Swamp John's intellectual property and to grant franchise rights, and in Swamp John's Investments, LLC, which they created to purchase property in Huntsville; at the time of the trial, the latter LLC was leasing property to the Huntsville franchise. The husband held the following interests in those businesses:

                John Shewbart d/b/a Swamp John's Restaurant
                  & Catering (sole proprietorship)             100%
                Swamp John's, Inc.                              26.5%
                Swamp John's of Huntsville, Inc.                20%
                Swamp John's Intellectual Property, LLC         25%
                Swamp John's Investments, LLC                   20%
                

Jonathan Cooper, one of the shareholders/members in the various corporations and LLCs, testified that the husband received $1,500 per month in dividends from his interests in the those entities.

At the trial, the parties disputed the value of the sole proprietorship. The wife noted that the husband had listed the value of the sole proprietorship as $300,000 in 2002. The husband testified that he had merely estimated the value in 2002 and that he did not believe the sole proprietorship was worth $300,000 at the time of the trial. He testified that his sister owned the building from which the sole proprietorship operated and that used cooking equipment and the trailers and vehicles used in catering jobs, worth a total of $14,000, constituted the only material assets of that business.

However, the wife introduced income-tax returns showing Swamp John's averaged gross sales between 2003 and 2007 of $1.3 million and averaged a net profit during those years of approximately $27,000. The wife also elicited statements from the husband in pretrial discovery indicating that the husband earned $1,500 a week from the sole proprietorship. The wife's attorney also questioned the husband regarding cash and coin deposits indicated on his checking-account statements that totaled approximately $5,000 per month. The husband admitted that he routinely withheld cash from the business and used those funds for personal expenses, but he denied that it was as much as $1,500 a week. He testified that he provided money for his daughter each week and that "I usually keep a couple hundred for me to get by on, I give [the wife] $250 a week. And otherwise, expenses are wrote [sic] out of checks from the account."

The husband testified that, at the time of the trial, he owned the following real property:

(a) the marital residence where the parties had lived since the first year of their marriage, which an expert real-estate appraiser valued at $110,000;

(b) a 3.5-acre tract of land on which the parties had previously lived, which the husband valued at $10,000;

(c) a 68-acre tract of land that the husband had received as a gift from his parents during the parties' marriage (no evidence was presented indicating that this property had been used for the benefit of the parties or the marriage);

(d) a 60 +-acre tract of land that the husband owned jointly with his father, which the husband valued at between $60,000 and $66,000 and the wife valued at $71,300; the husband testified that he owed his father $20,000 for having purchased the property and having deeded one-half of the property to the husband; and

(e) a 6-acre tract of undeveloped land located adjacent to Swamp John's in Red Bay (the sole proprietorship), which the husband valued at $10,000.

The evidence also established that the husband held the following bank accounts or other assets:

(a) a checking account with deposits from the sole proprietorship totaling approximately $10,000;

(b) a personal checking account with deposits totaling approximately $1,000 (c) a personal savings account with deposits totaling approximately $1,000;

(d) a joint account with the daughter with deposits totaling approximately $1,400;

(e) a college account for the daughter valued at approximately $15,000;

(f) an individual-retirement account that the husband had accrued during his previous employment valued at approximately $12,000; and

(g) a $500,000 life-insurance policy with a surrender cash value of $4,200.

At the time of the trial, the husband owed the following debts:

(a) the $74,600 debt borrowed against the marital residence;

(b) the husband's personal guarantee on the debt owed by Swamp John's of Huntsville, Inc.;

(c) a $5,000 obligation owed on the building out of which the Swamp John's catering business operated;

(d) an $18,000 balance owed on the parties' daughter's car; and

(e) $20,000 owed to the husband's father on the 60 +-acre tract the husband and his father owned jointly and on which the husband was living.

The husband submitted no evidence of his postdivorce monthly expenses. The wife estimated that she would need more than $3,400 each month to support herself. The...

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