Brown v. Brown

• Decision Date: 15 November 2022
• Docket Number: 2021-CA-00728-COA
• Citation: 350 So.3d 1169
• Parties: Greg BROWN, Appellant v. Rhonda BROWN, Appellee
• Court: Mississippi Court of Appeals

350 So.3d 1169

Greg BROWN, Appellant

v.Rhonda BROWN, Appellee

NO. 2021-CA-00728-COA

Court of Appeals of Mississippi.

November 15, 2022

ATTORNEY FOR APPELLANT: DEREK D. HOPSON, Clarksdale

ATTORNEY FOR APPELLEE: JERRY WESLEY HISAW, Southaven

EN BANC.

McDONALD, J., FOR THE COURT:

¶1. Greg Brown appeals the marital property division provisions in the DeSoto County Chancery Court's final judgment of his irreconcilable differences divorce. Greg challenges the court's valuation of several items, the valuation of a business that the parties owned, and the award of two specific items to his ex-wife, Rhonda Brown. Having reviewed the record, the arguments of counsel, and relevant precedent, we affirm the chancery court's judgment in part, reverse it in part, and remand the case for further proceedings.

Facts

¶2. Greg and Rhonda were married on October 14, 2006. They had no children together, but each spouse had children from prior marriages. After they married, Greg, Rhonda, and her two children lived in a home that Rhonda had purchased in 2004. Before the separation, the parties refinanced the house to lower the monthly payment.¹ At the beginning of their marriage, Rhonda worked as an apartment complex manager and received child support from her first husband.² Greg, who had been incarcerated from 2005 to 2006, began a lawn-mowing business and sold scrap iron. On December 23, 2009, Greg individually filed for Chapter 7 bankruptcy, which was later converted to Chapter 13 proceedings.³

¶3. In 2010, Greg and Rhonda started a small business, R&G Used Auto Sales (R&G). When the apartment complex Rhonda managed was sold in January 2015, Rhonda's employment was terminated. She received $15,000 in severance pay, which she invested in R&G along with $15,000 that she withdrew from her 401k retirement fund. She and Greg used that money to purchase vehicles for resale at R&G. Thereafter between 2015 and 2018, Rhonda worked with two other management companies and worked nights and weekends at R&G. In December 2018, Rhonda accepted a position with Fogel Management Group, earning approximately $3,225 per month.⁴

¶4. The parties separated in January 2017, and on April 10, 2018, Rhonda filed for divorce on both fault and no-fault grounds. In her complaint, she listed various items as property owned by the parties. Greg answered the complaint, and the parties participated in extensive litigation.

¶5. Greg filed his Rule 8.05 financial statement on January 29, 2019; Rhonda filed hers on March 9, 2020. See UCCR 8.05. Together, the two Rule 8.05 financial statements listed the following items of property owned by the parties: the marital home, household furniture and fixtures, personal clothing, R&G, a fishing boat, a four-wheeler, a camper, a commercial lawnmower, a tractor, a coin collection, a 2015 Outback, a 2007 Mazda, tools and equipment including a generator, air compressor, chainsaw(s) and miscellaneous tools, a joint bank account with Bancorp South, and an account at Regions Bank. At trial, Greg testified that he took the four-wheeler the parties owned, which was worth about $6,000; but it was totaled, and he no longer had it. Further, although Greg listed the 2015 Outback on his Rule 8.05 financial statement, the only vehicle Rhonda listed on hers was a Mazda. There was no testimony concerning the Outback vehicle. The parties listed their liabilities, including a house note to PNC bank, a note to Medallion for the camper, a note to Bridgecrest for the Mazda, and "credit card debt." There was no testimony or evidence presented to the court about the amount of any credit card debt or to whom such debt was owed.

¶6. On June 16, 2020, after the parties asserted that they had exchanged the Rule 8.05 financial statements, responded to all discovery, and exhausted settlement negotiations, the court administrator set the matter for trial on November 4, 2020. On November 2, 2020, the parties filed a joint motion to withdraw the contested grounds of divorce and proceed on the sole ground of irreconcilable differences. However, they could not agree upon the division of their property, and in their motion they requested that the court resolve this matter.

¶7. The court heard testimony from Greg and Rhonda at hearings held on November 4, 2020, and March 22, 2021.

Marital Home and Furnishings

¶8. Rhonda testified that she purchased the home prior to the marriage, and it remained titled in her name thereafter. The purchase price was $130,000, but on her Rule 8.05 financial statement, Rhonda valued the home at $100,000. She reported that the outstanding balance on the mortgage was $88,000, resulting in Rhonda's estimate of $12,000 in equity. In his Rule 8.05 financial statement, Greg valued the home at $135,000 with $109,000 still owed, resulting in $26,000 of equity. Information from an internet site was entered into evidence showing the home as potentially listing for $120,000. No formal appraisal of the home was presented. Rhonda testified that the household furnishings had a value of $3,000 to $4,000; in his Rule 8.05 financial statement, Greg estimated their value at $11,000.

¶9. Rhonda testified that both she and Greg paid for the family's living expenses during the marriage. She said that near the end of the year (October through November) she and Greg would use cash money to buy cars. During those months, she paid the house note out of her salary. During the other months of the year, Rhonda said Greg helped pay the house note from dealership funds.

R&G

¶10. Although Greg initially claimed that R&G was his alone, he admitted that the privilege license issued by West Memphis, Arkansas, to operate the business reflects both his and Rhonda's names as owners. By the time of trial, Greg had removed Rhonda's name from the company, but he admitted that Rhonda owned half of the company and half of the assets. In addition, he acknowledged Rhonda's contribution of $15,000 from her 401k account and her $15,000 severance pay to the business.⁵

¶11. R&G's bank statements between 2015 and 2017 were entered into evidence and showed monthly deposits that ranged from a low of $2,400.69 in November 2015 to a high of $38,097.90 in March 2017. According to these records, the business grew over the three years from 2015 through 2017. The annual deposits rose from $97,299.53 in 2015 to $169,343.91 in 2016 and to $182,465,82 in 2017. On his Rule 8.05 financial statement filed on January 20, 2019, Greg reported that his monthly income from the business and "jobs on the side" was $3,891.66 per month. Until the parties separated in January 2017, they purchased vehicles for cash; after the separation, Greg testified that he went to floor-plan financing, which meant he purchased vehicles with financing from a bank. He had ninety days to sell a vehicle or start paying the bank for it.

¶12. R&G was not incorporated and Greg included R&G's income and expenses on his personal 2016 tax return, which was also entered into evidence. The profit and loss schedule showed that in 2016, R&G grossed $276,476 and after $258,447 of expenses, its net profit was $18,029. The parties owned the building housing the business because no rent expense was listed and Greg testified that he was living at the dealership at the time of the trial. Among the other expenses for the dealership were $9,000 for "other business property," $4,750 in depreciation, and $220,924 in "other expenses," which included among other things the cost of purchasing and repairing the vehicles he sold. He valued the business's goodwill at $500. Despite R&G's net profit of $18,029 reported to the IRS for 2016, on his Rule 8.05 financial statement Greg valued R&G at $6,241, allegedly calculated from the 2016 tax return.

¶13. After the first day of testimony, the chancery court continued the case and ordered that in the future, "all vehicles sold from the lot were to be inventoried monthly." At the resumption of the hearing on March 22, 2021, Greg provided a two-page "inventory report" that allegedly showed completed sales since November. However, the report gave no information about the type of vehicles sold or their selling prices. Greg claimed that he could not print out the full report from the computer.

¶14. Greg testified that he was driving a 2001 truck that he purchased from the city at an auction last year. However, he also testified that he drove different vehicles every day, and all were titled in R&G's name.⁶ He said that he and Rhonda had also bought a red truck, worth $20,000 during the marriage that was used to haul cars. That vehicle was located at R&G.

Camper

¶15. In October 2015, the parties borrowed money from Medallion Bank to purchase a 2015 RV camper, priced at $19,887.90. Under the contract, they were obligated to pay a total of $48,660.48 over twelve years. Rhonda testified that the camper was titled in both their names. Neither party listed the camper on their Rule 8.05 financial statements; however, Rhonda testified that it was worth about $30,000 with $18,000 owed on it.

¶16. Greg testified that he took the camper after the parties separated because "the camper is in my name. It's mine." The actual title to the camper was not entered into evidence. Greg said Rhonda got behind on the payments so he took it. Rhonda admitted that she did get behind on the payments, but she had worked things out with the creditor so there was no threat of it being repossessed. She said that Greg took the camper without notice to her. Rhonda stated that she had taken her mother camping before and was planning another trip, and they loaded items in the camper in preparation for that trip. But they could not make this "last trip" because her mother became ill. Her mother's wedding ring was in the camper when Greg took it. Rhonda testified that she did not want the camper; she just wanted her mother's wedding ring.⁷ Greg testified that he had put the camper in his own name and that the payments were current. However, he agreed that...