Carney v. Carney

• Decision Date: 13 October 2016
• Docket Number: NO. 2010-CT-00646-SCT,NO. 2015-CA-00222-SCT,2015-CA-00222-SCT
• Citation: 201 So.3d 432
• Parties: Howard Wilson Carney, III v. Andrea Leigh Bell Carney
• Court: Mississippi Supreme Court

201 So.3d 432

Howard Wilson Carney, III

v.Andrea Leigh Bell Carney

NO. 2015-CA-00222-SCT

NO. 2010-CT-00646-SCT

Supreme Court of Mississippi.

October 13, 2016

ATTORNEYS FOR APPELLANT: CLIFFORD C. WHITNEY, III, J. MACK VARNER

ATTORNEY FOR APPELLEE: TRAVIS T. VANCE, JR.

EN BANC.

KITCHENS

, JUSTICE, FOR THE COURT:

¶ 1. This is the second appeal of the equitable distribution of assets of Howard Carney III and Andrea Bell Carney by the Chancery Court of Warren County. In the first appeal, this Court reversed and remanded, holding that the chancellor manifestly had erred by awarding 100% of the equity in the marital home to the wife, in the absence of an explanation for that award. Carney v. Carney , 112 So.3d 435, 439 (Miss. 2013)

. On remand, the chancellor reweighed the applicable factors under Ferguson v. Ferguson , 639 So.2d 921 (Miss. 1994), and again awarded 100% of the equity in the marital domicile to Andrea Carney, explaining that she had awarded all the equity to the wife to avoid an award of lump sum alimony, and providing additional reasons for the award, which were that the majority of the equity had come from the wife's contribution of $165,000 in life insurance proceeds toward the purchase of the residence, and that the wife had strong emotional ties to that home, which had been her family's “home place” since 1937. Under the deferential standard of review applicable to the decisions of the chancery court, we find that the chancellor's equitable distribution on remand was not manifestly wrong or clearly erroneous. Therefore, we affirm.

FACTS¹

¶ 2. The parties were married on November 20, 1998. The couple had two children, Amanda Leigh Carney, born in June 1999, and Katherine Emily Carney, born in June 2006. They purchased what was to be their marital home, known as the “Bell property,” in 2006. The house, which had been constructed in 1937, was the former home of the wife's grandparents and father. Later, it was purchased by the wife's sister, Patricia Barnes. But after Patricia Barnes passed away unexpectedly in 2004, her widowed husband placed the Bell property on the market.

¶ 3. Patricia Barnes had designated her sister, Andrea Carney, beneficiary of her $175,000 life insurance policy. Although the Carneys wanted to purchase the Bell property, the life insurance proceeds would not cover the full purchase price, and they were unable to obtain financing for the remaining amount. So another of Andrea Carney's sisters, Debra, and her husband, Bob Bayler, purchased the Bell property for $279,000 and rented it to Andrea and Howard Carney. Andrea paid the Baylers $165,000 from the life insurance proceeds as a down payment on the home. The Baylers financed the remainder of the purchase price with River Hills Bank, and they paid the mortgage installments using the Carneys' monthly rental payments.

¶ 4. On May 8, 2006, Andrea and Howard Carney borrowed $70,000 from Tensas State Bank. Of those funds, they used $54,102.13 to pay off the balance of the Baylers' mortgage with River Hills Bank. They placed the remaining $14,925.87 in a joint account. On May 8, 2006, Andrea, Howard, and the Baylers executed a settlement statement and the Baylers executed a warranty deed that conveyed the Bell property to Andrea Carney. Later, the Carneys placed a second mortgage on the Bell property for $10,030 to pay bills.

¶ 5. Howard and Andrea Carney separated on December 1, 2008. Andrea filed a complaint for divorce in December 2008, alleging grounds of habitual cruel and inhuman treatment, and/or irreconcilable differences, and in September 2009 she filed an amended complaint adding the ground of adultery. Howard Carney filed a countercomplaint for divorce on the grounds of habitual cruel and inhuman treatment, adultery, and/or irreconcilable differences. The chancery court entered a temporary order in March 2009 that granted Andrea Carney custody of the children and $2,000 per month in child support and temporary maintenance. On January 13, 2010, the parties filed a consent to a joint withdrawal of fault grounds, requesting an irreconcilable differences divorce. The parties asked that the chancellor determine the issues of child support, property division, alimony, and attorney fees.

¶ 6. On March 19, 2010, the chancellor entered a final judgment granting an irreconcilable differences divorce and equitably dividing the parties' assets under Ferguson v. Ferguson , 639 So.2d 921 (Miss. 1994)

. The chancellor awarded title and possession of the marital home to Andrea Carney, and additionally awarded her all of the equity in the home, for a total value of $186,052.57. After the equitable division, Andrea's assets totaled $224,050.57. Howard Carney was awarded assets totaling $13,453.15.² He was assessed $31,855.29 in marital debt, and Andrea Carney was assessed $66,898.13 in marital debt. Pursuant to the parties' agreement, the chancellor awarded custody of the minor children to wife and granted visitation to husband. The chancellor ordered husband to pay $590 per month as child support.

¶ 7. The chancellor deemed the Bell property a marital asset and determined that, at the time of the divorce, the Carneys' first mortgage had a remaining balance of $64,399.29, and their second mortgage had a remaining balance of $3,348.14. On May 28, 2009, the Bell property was appraised for $253,800, leaving equity of $186,052.57, after subtraction of the mortgage balances. The chancellor awarded Andrea Carney title to the property, possession of the property, and the entire $186,052.57 in equity.

¶ 8. The chancellor also found that, under the factors from Armstrong v. Armstrong , 618 So.2d 1278, 1280 (Miss. 1993)

, the wife needed alimony to meet the needs of herself and the minor children. After considering the factors from Tilley v. Tilley , 610 So.2d 348, 352 (Miss. 1992), the chancellor found that the facts did not justify lump sum alimony. But after considering the overlapping factors from Armstrong³ and Davis v. Davis , 832 So.2d 492 (Miss. 2002), the chancellor found that the wife needed periodic alimony. However, the chancellor made no award of periodic alimony, finding that “there are no liquid assets available to award periodic alimony.”

¶ 9. Howard Carney appealed, and this Court assigned that appeal to the Court of Appeals. The husband argued, inter alia , that the chancellor had erred by awarding the wife all the equity in the marital home. Carney v. Carney , 112 So.3d 453, 456 (Miss. Ct. App. 2012)

. Neither party raised an appellate challenge to the chancellor's findings on alimony. The Court of Appeals affirmed the property division. Id. at 460. That court found that the chancellor properly had deemed the equity in the Bell property a marital asset due to commingling and under the family use doctrine. Id. at 457. The chancellor had found that the wife's deposit of the life insurance proceeds into the parties' joint account and the use of those funds to purchase the marital home constituted commingling and use of the funds for family purposes. Id. at 456–57. Therefore, the chancellor found, the life insurance proceeds had been converted from the wife's separate property to a marital asset. Id. Thus, the chancellor concluded that the Bell property was a marital asset. Id. The Court of Appeals affirmed the chancellor's award of 100% of the equity in the Bell property to the wife under the Ferguson factors, stating that the decision was supported by credible evidence and noting that, in Mississippi, a chancellor is under no obligation to divide the marital estate equally. Id. at 459.

¶ 10. Howard Carney filed a petition for certiorari, which this Court granted. Carney , 112 So.3d at 435

. This Court unanimously reversed the part of the Court of Appeals decision that had affirmed the equitable distribution. Id. at 439. Justice Pierce, speaking for the Court, wrote that:

The chancellor found the “Bell Property” was marital property under the commingling-of-assets and marital-use doctrines. Hemsley v. Hemsley , 639 So.2d 909 (Miss. 1994)

.... On this basis, the chancellor found that the home was a marital asset. But the chancellor did not allot Howard any share in the home's equity. This created a significant disparity in the division of the marital estate. Further, by absolving Andrea from obligations on the second mortgage's remaining balance and assigning the balance to Howard, the chancellor's division resulted in even a greater disparity than that indicated in the above fact portion of this opinion. Technically, since this debt followed Howard, Andrea was awarded $189,400.71 in equity, not $186,052.57.

In dividing the marital estate, the chancellor conducted a thorough Ferguson analysis for the record. But we can find no explanation and/or justification therein for the disparity that resulted in the marital-estate division. ... And it appears to this Court that the chancellor, perhaps unintentionally, but nonetheless ultimately, treated those funds as nonmarital. This was manifest error. Having found that those funds were commingled with the marital estate, the chancellor was required to treat those funds as marital and to distribute and/or consider them equitably under the Ferguson factors.

[W]e iterate that awarding 100 percent equity in a marital asset to one party is not error per se. But, in this instance, based on the record before this Court, we are unable to ascertain why the chancery court awarded the entire equity of the marital home solely to Andrea, without awarding Howard some other equitable share in the marital estate or equitable relief from the marital debt. Accordingly, we reverse and remand this matter for further proceedings consistent with this opinion.

Id. at 438–39

.

¶ 11. On remand, the chancellor again awarded all of the equity in the marital residence to the wife; but this time she imposed repayment of the $3,348.14 second mortgage upon the wife instead of the husband. Additionally, the chancellor provided a thorough...