Arneault v. Arneault

• Decision Date: 05 October 2006
• Docket Number: No. 32865.,32865.
• Citation: 639 S.E.2d 720
• Court: West Virginia Supreme Court
• Parties: Edson R. ARNEAULT, Petitioner Below, Appellee, v. Margaret Beth ARNEAULT, Respondent Below, Appellant.

639 S.E.2d 720

Edson R. ARNEAULT, Petitioner Below, Appellee, v. Margaret Beth ARNEAULT, Respondent Below, Appellant.

No. 32865.

Supreme Court of Appeals of West Virginia.

Submitted: June 7, 2006.

Decided: October 5, 2006.

Dissenting Opinion of Justice Maynard December 4, 2006.

Dissenting Opinion of Justice Starcher November 30, 2006.

Concurring Opinion of Justice Benjamin December 15, 2006.

Syllabus by the Court

1. "`In reviewing a final order entered by a circuit judge upon a review of, or upon a refusal to review, a final order of a family court judge, we review the findings of fact made by the family court judge under the clearly erroneous standard, and the application of law to the facts under an abuse of discretion standard. We review questions of law de novo.' Syllabus, Carr v. Hancock, 216 W.Va. 474, 607 S.E.2d 803 (2004)." Syllabus point 1, Staton v. Staton, 218 W.Va. 201, 624 S.E.2d 548 (2005).

2. "Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review." Syllabus point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995).

3. "`W. Va.Code, 48-2-1(e)(1) (1986) [W. Va.Code § 48-1-233 (2001) (Repl. Vol. 2004)], defining all property acquired during the marriage as marital property except for certain limited categories of property which are considered separate or nonmarital, expresses a marked preference for characterizing the property of the parties to a divorce action as marital property.' Syl. pt. 3, Whiting v. Whiting, 183 W.Va. 451, 396 S.E.2d 413 (1990)." Syllabus point 2, Staton v. Staton, 218 W.Va. 201, 624 S.E.2d 548 (2005).

4. "Under equitable distribution, the contributions of time and effort to the married life of the couple-at home and in the workplace-are valued equally regardless of whether the parties' respective earnings have been equal. Equitable distribution contemplates that parties make their respective contributions to the married life of the parties in that expectation." Syllabus point 7, Mayhew v. Mayhew, 197 W.Va. 290, 475 S.E.2d 382 (1996), overruled on other grounds by Syllabus point 3, Mayhew v. Mayhew, 205 W.Va. 490, 519 S.E.2d 188 (1999).

5. "Where the language of a statute is clear and without ambiguity the plain meaning is to be accepted without resorting to the rules of interpretation." Syllabus point 2, State v. Elder, 152 W.Va. 571, 165 S.E.2d 108 (1968).

6. W. Va.Code § 48-7-105 (2001) (Repl. Vol. 2004) instructs a court how to equitably distribute a martial estate's ownership interests in a business entity and directs the court to (1) "give [a conditional] preference to the retention of the ownership interests" (2) consider the party who has the "closer involvement" with, "larger ownership interest" in, or "greater dependency" on such business; (3) further consider "the effects" that a "transfer or retention" of such ownership interests would have on the business, itself; and (4) secure the rights of the parties to receive that to which they are equitably entitled under this provision, either through an in kind transfer of the ownership interests or by the transfer of money or other property of equivalent value.

Richard Neely, Neely & Hunter, Charleston, for the Appellant, Margaret Beth Arneault.

Mark A. Swartz, Swartz Law Offices, L.C., Goodwin & Goodwin, LLP, Charleston, for the Appellant, Margaret Beth Arneault.

Robyn Ruttenberg, Law Offices of Robyn Ruttenberg, Wheeling, for the Appellant, Margaret Beth Arneault.

Ancil Ramey, Steptoe & Johnson, PLLC, Charleston, for the Appellee, Edson R. Arneault.

Thomas R. Goodwin, Susan Wittemeir, Johnny M. Knisely, II, Goodwin & Goodwin, Charleston, for the Appellee, Edson R. Arneault.

Daniel J. Guida, Guida Law Offices, Weirton, for the Appellee, Edson R. Arneault.

Robert P. Fitzsimmons, Fitzsimmons Law Offices, Wheeling, for the Appellee, Edson R. Arneault.

DAVIS, Chief Justice.

This family law case involves issues of equitable distribution and the disposition of marital property.¹ The appellant, Margaret Beth Arneault (hereinafter "Mrs. Arneault"), ex-wife² of appellee, Edson R. Arneault (hereinafter "Mr. Arneault") appeals from an order entered April 13, 2005, by the Circuit Court of Hancock County. By that order, the circuit court found that the rulings made by the Family Court of Hancock County were not clearly wrong and that the family court had not abused its discretion. On appeal, Mrs. Arneault argues that the lower courts improperly divided the marital estate with a 35/65 split, that certain stock should have been divided in kind rather than valued at a discount, and that the interest rate on the related payments was improper. Further, Mrs. Arneault argues that oil and gas entities controlled by Mr. Arneault were incorrectly valued for distribution purposes. In response, Mr. Arneault argues that the circuit court's order affirming the family court's decision was proper, with the exception of his cross assignment of error challenging the amount of discount to be applied to the valuation of the aforementioned stock.³ Based upon the parties' arguments, the record designated for our consideration, and the pertinent authorities, we determine that the circuit court's ratification of the equitable distribution order constituted an abuse of discretion. Thus, we reverse the decision of the circuit court.

I. FACTUAL AND PROCEDURAL HISTORY

A brief synopsis of the relevant facts shows that the parties were married on July 12, 1969, and now have two adult children. The parties had been married for thirty-three years when Mr. Arneault filed for divorce on March 22, 2002. By agreement of the parties, they denominated December 20, 2002, as their date of separation. By order of the family court, the parties were granted a divorce on July 22, 2004. The parties' marital home was located in Grand Rapids, Michigan. During the marriage, Mrs. Arneault stayed home with the children until 1990, when she returned to work on a part-time basis as a teacher. In 1995, Mrs. Arneault started her own business as a counselor providing college placement and career consulting services to high school students. While there is discord as to the effort Mrs. Arneault applied to her business, there is no dispute that Mrs. Arneault's business did not generate great income.

Mr. Arneault currently holds the same job position as he did at the time of the divorce. Mr. Arneault is Chairman, President, and Chief Executive Officer of MTR Gaming Group, Inc. (hereinafter "MTR"), which owns and controls Mountaineer Park, Inc., and operates video lottery terminals. Since 1995, Mr. Arneault has worked in Chester, West Virginia, away from the marital home. Prior to the divorce, he returned to Michigan on most weekends. There is no dispute that Mr. Arneault has been responsible for MTR's great success. In return for his achievements, Mr. Arneault has received a lucrative income from MTR, as well as MTR stock. Mr. Arneault owns 3,308,532 shares of MTR stock in his name; 199,333 shares of stock held by a company that is owned solely by Mr. Arneault; and 300,000 shares held in option.⁴ These stock holdings amount to Mr. Arneault owning approximately 13.25% of the total shares of MTR. The MTR stock is publicly-traded on the NASDAQ Stock Market.⁵ All parties concede that this stock was acquired during the parties' marriage and is properly the subject of equitable distribution.

In the bifurcated case below, the family court determined that because Mr. Arneault had contributed significantly to the marital estate, a 50/50 split of the estate would be inequitable. Thus, the family court ordered that the parties' marital estate be divided 35/65, with Mr. Arneault receiving the larger share. Further, the family court determined that the MTR stock should be retained solely by Mr. Arneault, rather than being distributed in kind to Mrs. Arneault, and that Mr. Arneault should pay Mrs. Arneault her proportionate share of the value thereof. To ascertain the MTR stock's value, the family court applied discount principles, which took into consideration the limitations on Mr. Arneault's ability to sell the stock,⁶ and directed Mr. Arneault to pay Mrs. Arneault her share of the stock valuation at the discounted rate, over a period of ten years, at a two percent interest rate. Finally, the family court valued Mr. Arneault's oil and gas interests, which included MTR stock as one of the company assets, and again applied discount principles to the MTR stock. Mrs. Arneault appealed these adverse rulings to the circuit court. By order entered April 13, 2005, the circuit court affirmed the family court's decisions. Mrs. Arneault now appeals to this Court.

II. STANDARD OF REVIEW

The standard of review with which we approach this matter has been explained as follows:

"In reviewing a final order entered by a circuit judge upon a review of, or upon a refusal to review, a final order of a family court judge, we review the findings of fact made by the family court judge under the clearly erroneous standard, and the application of law to the facts under an abuse of discretion standard. We review questions of law de novo." Syllabus, Carr v. Hancock, 216 W.Va. 474, 607 S.E.2d 803 (2004).

Syl. pt 1, Staton v. Staton, 218 W.Va. 201, 624 S.E.2d 548 (2005). See also Syl. pt. 2, Lucas v. Lucas, 215 W.Va. 1, 592 S.E.2d 646 (2003) ("`In reviewing challenges to findings made by a family court judge that also were adopted by a circuit court, a three-pronged standard of review is applied. Under these circumstances, a final equitable distribution order is reviewed under an abuse of discretion standard; the underlying factual findings are reviewed under a clearly erroneous standard; and questions of law and statutory interpretations are subject to a de novo review.' Syl. Pt. 1, Burnside v. Burnside, 194 W.Va. 263, 460 S.E.2d 264 (1995).").

Finally, because resolution...