Byrd v. Byrd, 2011–CA–01410–SCT.

• Decision Date: 01 November 2012
• Docket Number: No. 2011–CA–01410–SCT.,2011–CA–01410–SCT.
• Citation: 100 So.3d 443
• Parties: Lea Ann BYRD v. Jonathan Wayne BYRD.
• Court: Mississippi Supreme Court

100 So.3d 443

Lea Ann BYRD

v.Jonathan Wayne BYRD.

No. 2011–CA–01410–SCT.

Supreme Court of Mississippi.

Nov. 1, 2012.

Kay Farese Turner, Emily Lauren Hamm, attorneys for appellant.

M. Lee Graves, Jr., Deborah H. Bell, attorneys for appellee.

Before CARLSON, P.J., PIERCE and KING, JJ.

PIERCE, Justice, for the Court:

¶ 1. Jonathan and Lea Ann Byrd were married in 1991. They had four children together: A.A. (born 1990), P.A. (born 1995), K.A. (born 1996), and N.A. (born 1999). Jonathan has two additional children, one of whom was born during his marriage to Lea Ann. In 2003, Lea Ann and Jonathan separated, and they have lived apart since then. Jonathan continued to support Lea Ann during the separation. During that time, she received her nursing degree and began working as a registered nurse. She is currently working on her nurse practitioner degree. Jonathan has provided a home, the Noland Topper Residence, for Lea Ann and their children, which is owned by the Byrd Sons Residual Trust (Trust), a testamentary trust established by Jonathan's father for the benefit of Jonathan, his two brothers, Keith Byrd and Barry Lynn Byrd, and their children. Through proceeds from the Trust, Jonathan paid most expenses for the home and the children's private education. During the marriage, Lea Ann was a stay-at-home mother. Because of Jonathan's extramarital affair, which resulted in a child, Lea Ann filed for divorce. On August 25, 2011, the trial court entered a final order granting the parties a divorce. The chancellor awarded custody of the four girls to Lea Ann and granted Jonathan visitation.

¶ 2. The grant of divorce and custody are not at issue in this appeal. The appeal deals with the chancellor's financial awards of property division, alimony, and child support. Much of the dispute centers upon the Trust. Jonathan is a one-third beneficiary of the Trust and also is a cotrustee. All assets from the Trust will be distributed to Jonathan, Keith, and Barry in September 2014. Each will receive one-third of the assets. The chancellor found the gross value of the Trust, excluding liabilities, totaled $14,781,285.28.

¶ 3. The chancellor valued the marital property of Lea Ann and Jonathan at $1,883,467.49 and ordered a cash payment to Lea Ann of $918,233.75. Due to the marital assets Lea Ann received and the likelihood of her earning a substantial income after completing her nurse practitioner's degree, no permanent alimony was awarded. On rehearing, however, the chancellor awarded Lea Ann thirteen months of rehabilitative alimony of $1,500 per month and use of the marital home until October 2012. Jonathan was ordered to pay $3,000 a month in child support (which is an upward deviation from the child-support guidelines provided in Mississippi Code Section 43–19–101), attorney fees, and $150,000 in sanctions.

¶ 4. Lea Ann raises numerous issues on appeal, which are accompanied by a number of subarguments. To avoid repetition, we have consolidated some of these issues, and we will address each of Lee Ann's arguments accordingly. Additional facts, as necessary, will be related during our discussion of the issues.

DISCUSSION

¶ 5. This Court will not reverse a chancellor's decision unless the chancellor's findings are clearly erroneous, manifestly wrong, or the chancellor applied an incorrect legal standard. Pearson v. Pearson, 761 So.2d 157, 162 (Miss.2000). The chancellor's ruling will be upheld if supported by substantial credible evidence. Carrow v. Carrow, 642 So.2d 901, 904 (Miss.1994).

I. Whether the trial court manifestly erred in its classification of Jonathan's one-third interest in the Trust as his separate property, its valuation of the Trust, and its statement of Jonathan's income.

¶ 6. Lea Ann first argues that the chancellor erred in classifying Jonathan's one-third interest in the Trust as his separate property. She contends that the evidence is clear that, to the extent of Jonathan's one-third interest in the Trust, the corpus of the Trust had been inextricably commingled with marital assets so as to transmute it to marital property.

¶ 7. Before a chancery court can divide a couple's assets, it must first classify the assets as marital or separate property. Fisher v. Fisher, 771 So.2d 364, 368 (Miss.2000). “Marital assets” are those assets accumulated or acquired during the marriage. Wheat v. Wheat, 37 So.3d 632, 637 (Miss.2010). Excluded from the definition of “marital assets” are those assets attributable to one party's separate estate prior to or outside the marriage. Craft v. Craft, 825 So.2d 605, 608 (Miss.2002). After classifying the parties' assets as either marital or nonmarital, the chancellor should then proceed with the equitable division of the property using the factors set forth by the Supreme Court in Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss.1994). Finally, the chancellor should examine whether the equitable division of the marital property, considered in light of the nonmarital assets, adequately provides for both parties. Kilpatrick v. Kilpatrick, 732 So.2d 876, 880 (Miss.1999). “[I]f the marital assets, after equitable division and in light of the parties' non-marital assets, will adequately provide for both parties, then ‘no more need be done.’ ” Id. (quoting Johnson v. Johnson, 650 So.2d 1281, 1287 (Miss.1994)). But “if an equitable division of marital property, considered with each party's non-marital assets, leaves a deficit for one party, then alimony should be considered.” Id.

¶ 8. Here, the chancellor found that Jonathan and Keith, using funds from the Trust, had purchased a furnished condominium, a boat slip, and a residence in Baldwin County, Alabama. Because these assets were used regularly by Jonathan's family, the chancellor classified Jonathan's half interest in these assets as marital property and appropriately assessed that interest in his equitable distribution of the parties' marital estate. Lea Ann contends that this use of the Trust demonstrates that Jonathan treated it as his “personal piggy bank.” She maintains that Jonathan constantly took money out of the Trust to pay for other personal and/or family expenses, and he regularly transferred funds between the Trust and two partnerships, the St. Charles Plantation and Forrest Plantation (two separate farming operations),in which each of the three brothers is a one-third partner.

¶ 9. The record before us reflects that the chancellor complied with precedent in classifying the parties' assets prior to the equitable division of the property. In his findings of facts and conclusions of law, the chancellor found that the Trust, with the exception of a gold and diamond ring, is comprised solely of real property, cash, or cash equivalents. The chancellor thoroughly analyzed the evidence presented on the question of whether the Trust corpus had been commingled with the marital property so as to convert it to marital property. The chancellor found that, even though proceeds from the Trust might have been used to purchase assets which became marital property, at no time did any assets, proceeds, or money go into the Trust from the marriage. The chancellor concluded that the Trust corpus was exempt from being classified as marital property. The record supports the chancellor's finding, and we find no merit in Lea Ann's contention that the chancellor erred in classifying Jonathan's one-third interest in the Trust as his separate property.

¶ 10. Next, Lea Ann argues that the chancellor manifestly erred in his valuation of the Trust. Lea Ann asserts that the chancellor incorrectly valued the Trust at $14,781,285.28. She contends that the correct value of the Trust is $17,750,827.28.

¶ 11. The difference in these figures represents contrasting valuations claimed by the parties with regard to certain properties. Based on our review of the evidence, the only clear error(s) made by the chancellor in his valuation of the Trust was his failure to include a $150,000 account receivable owed to the Trust (which constituted a Trust asset), an erroneous inclusion of a $195,000 debt (which constituted a Trust liability), and a $20,000 error in valuing property located in Nevada owned by the Trust. This amounted to a $360,000 difference from the chancellor's valuation, of which Jonathan's share would be $120,000.

¶ 12. We find the chancellor's valuation error to be insignificant in this instance. The error pertains only to property belonging to the Trust, which the chancellor found to be nonmarital. Further, as will be addressed below, the chancellor's equitable division of the marital property, considered in the light of the nonmarital assets, more than adequately provides for Lea Ann. Thus, the error was harmless. Cf. Tillman v. Tillman, 716 So.2d 1090, 1095 (Miss.1998).

¶ 13. Lastly, Lea Ann asserts that the chancellor manifestly erred in finding that Jonathan's income from the Trust was $135,000. This figure represents Jonathan's gross income of $175,000 less $40,000 in taxes. Lea Ann contends that the $135,000 number is incorrectly calculated, because the Trust pays Jonathan's personal taxes.

¶ 14. The chancellor's finding is based on the adjusted gross income after reviewing the relevant financial information. Accordingly, we find no error in the chancellor's finding that Jonathan's adjusted gross income amounts to $135,000.

II. Whether the trial court manifestly erred in its identification, characterization and valuation of certain marital property; and in making an equitable division of marital property pursuant to the Ferguson factors.

¶ 15. Lea Ann asserts on appeal that the chancellor erred in identifying, characterizing, and valuing the Duncan, Mississippi, residence (where Jonathan resides), her 2001 Cadillac, payments made by Jonathantoward credit-card debts, and additional dissipation of marital assets by Jonathan.

¶ 16. First, Lea Ann argues that the chancellor should have valued the Duncan residence at $425,000,...