Burns v. Burns
| Decision Date | 02 May 2000 |
| Docket Number | No. 1998-CA-01042-COA.,1998-CA-01042-COA. |
| Citation | 789 So.2d 94 |
| Parties | James Curtis BURNS, Jr., Appellant, v. Dorothy Anne (Nardozzi) BURNS, Appellee. |
| Court | Mississippi Court of Appeals |
T. Swayze Alford, Walter Alan Davis, Saltillo, Attorneys for Appellant.
John Thomas Lamar Jr., Senatobia, H.R. Garner, Hernando, Attorneys for Appellee.
Before KING, P.J., BRIDGES, and MOORE, JJ.
KING, P.J., for the Court:
¶ 1. On August 19, 1996, Dorothy Anne Nardozzi Burns (Dorothy) filed for divorce from James Curtis Burns, Jr. (J.C.). Later, the parties agreed to the entry of a consent decree of divorce on the grounds of irreconcilable differences. In the consent decree, the parties stipulated to certain issues and then set out issues for the chancellor to decide. The parties asked that the chancellor determine the equitable division of real and personal property and other things which are not considered in this appeal.
DISPOSITION AT TRIAL
¶ 2. The chancellor made a virtually even distribution of marital assets. The question of whether J.C. owned 10,000 shares of stock in Meek Auto Sales, Inc. is the main point of contention in this appeal. In J.C.'s brief, he asserts several assignments of error, some of which are interrelated. Below are the issues we will address
I. DOES THE CHANCELLOR'S FINDING OF FACT THAT JAMES CURTIS BURNS, JR. OWNED 10,000 SHARES OF STOCK IN MEEK AUTO SALES CONSTITUTE REVERSIBLE ERROR?
II. DID THE CHANCELLOR COMMIT MANIFEST ERROR IN DIVESTING STOCK OWNERSHIP OF MEEK AUTO SALES, INC. FROM CHARLES SIDNEY MEEK WHEN HE WAS NOT A PARTY TO THE ACTION?
III. DID THE CHANCELLOR COMMIT REVERSIBLE ERROR IN ADMITTING EVIDENCE RELATIVE TO THE VALUE OF THE 10,000 SHARES OF MEEK AUTO SALES, INC. STOCK?
IV. DID THE CHANCELLOR ERR BECAUSE NO EVIDENCE OF THE VALUE OF MEEK AUTO SALES, INC. STOCK WAS PRODUCED IN DISCOVERY?
V. WAS THE CHANCELLOR MANIFESTLY IN ERROR IN THE DISTRIBUTION OF ASSETS?
¶ 3. Finding no reversible error, we affirm the chancellor's decision in this matter.
FACTS
¶ 4. J.C. and Dorothy were married on March 23, 1969, and lived together as man and wife until the date of their final separation on July 29, 1996, in Panola County, Mississippi. On August 19, 1996, Dorothy filed for divorce and the chancellor heard testimony on February 16 and 17, 1998.
¶ 5. Both J.C. and Dorothy in their testimony revealed that the young couple started their marriage with very few material assets. During the years of their marriage, each helped the other earn a college degree. Both Dorothy and J.C. worked together in the accumulation of marital assets, which the chancellor found to be $1,547,071.86 in total value. Dorothy became employed with the Farmer's Home Administration, on December 19, 1976, where she continued to work at the time of the parties' separation and divorce, earning a little over $30,000 per year, benefits, and retirement. J.C. was employed as a bank officer with Security Bank of Batesville in 1973, where he continued to be employed as a vice president at the time of the separation and divorce, earning $96,000 per year, benefits, stock, and retirement. J.C. was also involved in a number of corporations and business partnerships with third parties.
¶ 6. As the main point of contention in this appeal is whether the chancellor erred in determining whether J.C. owned 10,000 shares of stock in Meek Auto Sales, the rest of this factual section will deal with the testimony gathered at trial on this matter.
¶ 7. Dorothy testified that J.C. told her in 1981 that he had gone into business with Sid and Jimmy Meek, as a partner in a used car dealership, Meek Auto Sales, Inc., obtaining a one-third interest in the business. He told her he was not drawing any salary from this venture, but rather he would meet with Sid and Jimmy once a year and divide the proceeds to offset car tags and insurance. Through the years the dealership would also do maintenance and replace tires on the family automobiles for no charge. Dorothy testified that the majority of the family automobiles came from Meek Auto Sales. At one point, J.C. mentioned to Dorothy that the dealership had taken out a life insurance policy on him, and that Sid and Jimmy, as beneficiaries, could use the life insurance policy to buy her shares in case of his death.
¶ 8. On cross-examination, Dorothy testified that she did not see an exchange of money from Meek Auto Sales to J.C. That no money was deposited in their joint checking accounts, but that J.C. had a personal account to which she did not have access. She testified that there was a safety deposit box that had cash in it, but she did not know if the money came from Meek Auto Sales.
¶ 9. J.C. Burns testified that he was very good friends with Sid and Jimmy Meek and in 1981 he loaned Sid Meek $10,000. In exchange for the $10,000 loan, Sid Meek gave him a stock certificate as security for the payment of the debt. J.C. acknowledged telling Dorothy that he had an interest in Meek Auto Sales, but testified that he was lying and merely told her that to impress her, or get some recognition from her that he was doing well financially. He stated that he never collected interest on the note since 1981 and that Sid never tried to pay the note back, although the note stated that repayment was to be made no later than April 21, 1982. A copy of the note was made an exhibit during the trial. On the body of the note, which J.C. had filled out, was written, "This note is given for the purchase price or part of the purchase price of 10,000 shares of Meek Auto Sales, Inc. Common Stock." J.C. produced the original stock certificate at trial, which had the signature of Charles Sid Meek on the back with a blank space to be filled in as to the new owner. J.C. testified that he did not take part in any stockholder's meetings, financial or business discussions, or any company decisions. J.C. was able to take his automobiles into Meek Auto Sales and have them serviced at no charge and he also was able to drive Meek Auto Sales's automobiles.
¶ 10. A confidentiality agreement pertaining to Meek Auto Sales, was prepared and submitted to Dorothy's attorney. When asked why there would be a need for a confidentiality agreement if he had no ownership interest in Meek Auto Sales, J.C. stated that the agreement was needed because he was in the banking business, and simply did not think it would look right to other automobile dealerships if his personal loan to Sid became public information.
¶ 11. Prior to Dorothy's attorney calling Sid Meek to the stand, an attorney for the Meeks addressed the chancellor. This attorney explained that approximately two months before the trial began Dorothy served subpoena duces tecum to both the Meeks during their deposition asking each to bring any documents that reflected J.C.'s interest in Meek Auto Sales. A protective order was sought to deny such information being released during the trial of this matter. The chancellor found that protection was in order, as the information sought would require disclosure of commercial information; however, the chancellor found nothing which prohibited Dorothy from questioning her witness concerning J.C.'s ownership interest, as well as any information which would tend to show the worth of the company. The chancellor found that the information so disseminated in the proceedings should not be open for public view.
¶ 12. Thereafter, Sid Meek testified that Meek Auto Sales, Inc. has been in business since 1981. He stated that J.C. made a personal loan to him for $10,000 and that he gave J.C. a stock certificate for 10,000 shares of stock in Meek Auto Sales to hold only as collateral for the loan. He stated that the corporation of Meek Auto Sales issued 30,000 shares of Common Stock. James S. Meek owned 10,000 shares of stock or 33.33%. Sid stated that he owned 20,000 shares of stock or 66.67% of the stock. Sid testified that J.C. never received any cash from Meek Auto Sales. Sid produced the 1996 corporate tax return for Meek Auto Sales which showed the value of the company. Sid testified that with the exception of J.C.'s loan, Sid held no other debt at all on the corporation or himself.
¶ 13. The chancellor questioned Sid and asked him what were the terms of the repayment of the loan. Sid testified that he was supposed to pay J.C. back in 1982, but had not. He testified that there was no particular reason he had not repaid the loan and J.C. had not asked for the loan to be repaid. Sid testified that he did not know what sort of interest J.C. would want to collect on the loan.
¶ 14. Relying on the 1996 tax return for Meek Auto Sales, the chancellor ruled that the 10,000 shares of stock were actually owned by J.C. The chancellor ruled that the shares were marital property and subject to equitable division. The chancellor found that the alleged loan between J.C. and Sid Meek was a sham and an attempt to secret the rightful ownership of the 10,000 shares. In support of this, the chancellor looked at the open endorsement of the stock certificate, the privileges, synonymous with ownership, which the company throughout the years provided J.C., and the unexplained non-attempted collection or payment of the debt by either the creditor or debtor, both of whom in the court's opinion appeared to be astute businessmen who were otherwise extremely knowledgeable in aboveboard business transactions.
ANALYSIS
Standard of review
¶ 15. The standard of review of findings of fact made by a chancellor is extremely deferential. This Court always reviews a chancellor's findings of fact, but they will not be disturbed unless they are manifestly wrong or clearly erroneous. Denson v. George, 642 So.2d 909, 913 (Miss.1994) (citation omitted). A chancellor's equitable division of marital property is also subject to the traditional scope of review in which we will not disturb the chancellor's findings "`unless...
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