Barrup v. Barrup

• Decision Date: 07 November 2014
• Docket Number: No. 12–415.,12–415.
• Citation: 111 A.3d 414,2014 VT 116
• Court: Vermont Supreme Court
• Parties: Kevin BARRUP (Marilyn Barrup, Intervenor) v. Tammy BARRUP.

111 A.3d 414

2014 VT 116

Kevin BARRUP (Marilyn Barrup, Intervenor)

v.Tammy BARRUP.

No. 12–415.

Supreme Court of Vermont.

Nov. 7, 2014.

Bruce C. Palmer of Downs Rachlin Martin PLLC, St. Johnsbury, for Intervenor–Appellee/Cross–Appellant.

Tammy J. Barrup, Pro Se, Island Pond, Defendant–Appellant.

Present: REIBER, C.J., DOOLEY, SKOGLUND, ROBINSON and CRAWFORD, JJ.¹

Opinion

ROBINSON, J.

¶ 1. The primary issue in this case involves the rights of a divorcing husband's mother whose property interests were purportedly adjudicated in a final divorce decree in an action to which she was not a party. Appellant, former wife Tammy Barrup, appeals an order modifying a final property-division order to account for the recorded interest of her former husband's mother in property that was purportedly divided in the final divorce decree, and also modifying spousal maintenance. Intervenor, former husband's mother Marilyn Barrup, cross-appeals. We affirm.

¶ 2. This has been an acrimonious divorce, with multiple post-judgment motions. The procedural background most relevant to this appeal is as follows. The parties were married in 1986 and separated for the last time in 2004. The Superior Court, Family Division, Orleans Unit issued a final order and decree of divorce in this case in November 2007. The court found that the parties owned, among other things, husband's interest in a closely held family business with his parents, two other businesses run by husband, two residences, and various investments. The court found that “the parties' LPL Financial Services stock and mutual funds (including the CNB [Community National Bank] stock) had a value of approximately $363,495.”² The court awarded $3,250 of

these accounts to wife “to reflect her share of a pre-separation disbursement from this account” to husband, and then awarded seventy percent of the remaining funds to wife, while husband received the remaining thirty percent. The court explained that its award of a disproportionate share of these accounts to wife reflected, and to some extent offset, the court's award of his interest in the family business to husband.³

¶ 3. With respect to spousal maintenance, the trial court concluded that although the property-division award to wife might meet her reasonable needs in the short term, she would not be able to support herself without exhausting those resources. Considering the parties' respective earning power, the length of the marriage, and wife's reasonable needs, the court ordered husband to pay spousal maintenance to wife in the amount of $12,000 per year, in quarterly installments, until wife reached the age of sixty-two.

¶ 4. Husband filed a motion to amend the judgment, raising a host of issues. The court's final decree included a CNB stock account valued at $59,000 as part of the recitation of the value of the LPL portfolio. Husband argued that this was improper, contending that the CNB account was not marital property subject to distribution. He argued that the evidence presented at trial reflected that the funds in this account came from an inheritance from his grandmother that was to be held by his mother until her death. He had testified that he was not authorized to withdraw funds from the account.

¶ 5. In a January 2008 order, the trial court rejected husband's motion, concluding that the evidence did not support husband's claim that the stock at issue was held in trust or controlled by his mother. To the contrary, the account-holders were identified (presumably in the exhibits) as Kevin and Tammy Barrup, and the value of the account was identified as $96,953. The court's distribution of a stock account allegedly jointly owned by husband and his mother was not one of the various issues raised by husband in his appeal of the final divorce decree and the decision regarding his motion to alter or amend. See

Barrup v. Barrup, No. 2010–018, 2010 WL 7799798 (Aug. 18, 2010) (unpub.mem.), https://www.vermontjudiciary.org/UPEO2006–2010/eo10–018.pdf.

¶ 6. Subsequently, wife filed multiple motions to enforce the judgment, including a March 2009 motion for division of marital accounts, and husband filed a motion to modify spousal maintenance. Concerning the property division, husband renewed his contention that one of the two CNB stock accounts was not marital property subject to division. In its November 2009 decision, the trial court revisited the question of which of the CNB accounts were subject to the property distribution in the final divorce decree. The court acknowledged that the CNB accounts were not actually part of the LPL portfolio, which was undisputedly subject to a 70%–30% division pursuant to the express terms of the final order, but concluded that the court's intention in the final divorce decree to subject the CNB accounts to the same 70%–30% split was clear from its prior orders, especially given the valuation assigned to the account that the court ordered to be divided. That the CNB account owned jointly by husband and wife was subject to division was also clear and undisputed.

¶ 7. With respect to husband's argument that the other CNB account was not, in fact, marital property, the court noted that the trial court's order to divide the disputed account (which was not appealed) was a final and binding order of the court not subject to challenge. Moreover, reviewing a bank record that had been admitted at trial, the court concluded that the account in question was held in husband's name, and that “[t]here is absolutely no indication that these shares are held subject to any restriction, or in trust status.”⁴ This order did not purport to address husband's motion to modify spousal maintenance.

¶ 8. Following this 2009 order, husband's mother moved to intervene pursuant to Vermont Rule for Family Proceedings 4(a)(1) and Vermont Rule of Civil Procedure 24(b)(2), arguing that her property interests were affected by the court's entry orders, that she had not been party to the underlying divorce or post-judgment motions, that she must be allowed to establish her ownership of property over which the court had exercised jurisdiction,

and that she must be afforded due process in connection with the disposition of her property. Husband's mother also raised, on her own behalf, the same argument as husband—that the disputed CNB account was not marital property subject to distribution. In an accompanying motion based on V.R.C.P. 59 and V.R.C.P. 60, husband's mother made the same assertion as husband had made previously—the disputed CNB account was hers—held jointly with husband but subject to her control until her death. The court granted the motion to intervene.

¶ 9. The court held a hearing in August 2012 to address the outstanding issues concerning the disputed account and the enforcement or modification of spousal maintenance.⁵ On the first issue, the court concluded that its prior conclusion that there was no evidence that the disputed account was subject to any restrictions or interest of husband's mother was not based on good evidence. Before husband's mother intervened, nobody presented the court with the actual stock certificates or other primary evidence of ownership. The bank account statement referenced by the court in its November 2009 ruling was a “consolidated” bank statement that, in accordance with the bank's convention, simply reflected a person's ownership interest in any assets within the bank's control without purporting to describe how each account was held. By the same token, because he was listed first on the account, husband received the applicable IRS Form 1099–DIV, but that did not mean he was sole owner. In fact, the court found, husband's mother had owned the stocks in the account and put husband's name on the account. At the time of the final divorce hearing, the stocks in the account were titled jointly to husband and his mother, with rights of survivorship.

¶ 10. The court noted the testimony by husband as well as his father⁶ that husband's mother had put husband's name on the stocks as an estate-planning tool, and that she had never intended to make a current gift to him. However, it did not credit that testimony, citing the presumption that “the act of titling property in another's name establishes intent to convey a present [beneficial] interest in the property,”

Brousseau v. Brousseau, 2007 VT 77, ¶ 12, 182 Vt. 533, 927 A.2d 773 (mem.), and noting that there was evidence that husband and wife had included the value of the account on asset and income statements when applying for loans. The court thus concluded that husband had an interest in the account that was subject to distribution by the trial court, and proceeded to consider the extent of husband's interest.

¶ 11. Noting that most courts presume that such joint accounts are held in equal shares, and that by statute Vermont law presumes that jointly held real property is held in equal shares, 27 V.S.A. § 2(b)(2)(A), the trial court presumed that husband and his mother held equal shares in the account. Because it found no evidence to rebut this presumption, the trial court concluded that half of the shares in the disputed account were subject to distribution. The court thus ordered husband's mother, to whom husband had purportedly transferred his interest in 2009, to convey to wife seventy percent of husband's interest in the account, or thirty-five percent of the account (exclusive of any withdrawals or liquidations made since the account's transfer, and inclusive of any dividend reinvestments or share splits).

¶ 12. With respect to spousal maintenance, the court reviewed the ebbs and flows of husband's income over several years, and compared that income to the income relied upon by the trial court in assessing spousal maintenance in the first instance. The court concluded that the initial divorce decree and spousal-maintenance award assumed that husband's annual income was $78,000, representing his salary from the family business. The court found that...