Cassell v. Cassell

• Docket Number: 2023-CA-00213-SCT
• Decision Date: 20 June 2024
• Citation: 389 So.3d 305
• Parties: Katherine CASSELL v. William CASSELL
• Court: Mississippi Supreme Court

389 So.3d 305

Katherine CASSELL

v.William CASSELL

NO. 2023-CA-00213-SCT

Supreme Court of Mississippi.

06/20/2024

CLAIBORNE COUNTY CHANCERY COURT, E. VINCENT DAVIS, JUDGE

ATTORNEY FOR APPELLANT: DAVID BRIDGES

ATTORNEY FOR APPELLEE: B.

BLAKE TELLER, Vicksburg

BEFORE RANDOLPH, C.J., COLEMAN AND CHAMBERLIN, JJ.

CHAMBERLIN, JUSTICE, FOR THE COURT:

¶1.Katherine Cassell(Kathy) appeals from a final judgment of divorce.She argues that William Cassell(Bill) did not rebut the marital property presumption with regard to two separate tracts of land and that the chancellor should have fully considered and granted an award of lump sum alimony.The chancellor did not err in his findings of fact and conclusions of law, and, therefore, the judgment is affirmed.

FACTS AND PROCEDURAL HISTORY

¶2.Kathy and Bill married on August 17, 1991, in Claiborne County.They did not have any children together, but they each had children from previous marriages.Prior to the marriage, Bill and his two siblings had inherited land in Mississippi from their mother.Along with their father, Bill and his siblings formed Waterloo Farms, Inc.(Waterloo), in 1987, which held title to the inherited land.In addition to the inherited land, Waterloo owned land consisting of two tracts—Tract One and Tract Two—located in Claiborne County.Tract One was an amalgamation of inherited land and land that Waterloo purchased from Mississippi River Lodge, LLC in 2008.Tract Two was purchased by Waterloo in 1990 from James Beesley.In that same year, Waterloo sold a portion of Tract Two to Black Creek Planting Company, Inc.Subsequently, Waterloo bought the portion of Tract Two back from Black Creek Planting Company, Inc., in 1997.

¶3.In 1996, after Kathy and Bill were married, Bill began farming as Valley of the Moon Farms, LLC(VOM).VOM was owned 50 percent by Bill and 50 percent by Moon Planting Company, Inc.(MPC).MPC was formed by Bill’s father, and in 1998, he transferred 99 percent of MPC’s ownership to Kathy and 1 percent to Bill.In summary, VOM was owned 50 percent by Bill and 50 percent by MPC—of which Bill owned 1 percent and Kathy owned 99 percent.

¶4.Kathy and Bill maintained two bank accounts—one personal joint account and one account for VOM.Revenue from VOM was deposited into the VOM account and from there, money would be transferred into Kathy and Bill’s joint personal account for monthly expenses.VOM would also pay both Kathy and Bill’s personal credit cards.In addition to the couple’s personal expenses, the VOM account paid all of VOM’s business expenses, such as rent to Waterloo to farm the land, farm equipment, fuel and seed.Bill also received distributions from Waterloo, which he would place in the VOM account.

¶5.In 2006, Bill, his brother and Fred Hart purchased property in Kansas using money from Waterloo distributions.In 2012 or 2013, they exchanged the property in an Internal Revenue Code Section 1031 tax-free exchange ¹ for a second piece of property in Kansas.Bill testified that in 2019, this second property was either similarly exchanged under Section 1031, or it was sold, and the proceeds were used to acquire property from Daniel and Ashley Turley(Turley Property).A warranty deed conveying the second property to Lamar and Jacob Perry was signed by Kathy along with Bill and his brother.Bill testified that Kathy’s signature was required to convey the property according to Kansas state law.There were no deeds entered into evidence that identified Kathy as a grantee of any of the properties in Kansas.When Bill and his brother obtained the Turley Property, Bill received a two-thirds interest, while his brother received a one-third interest.Only Bill and his brother signed the warranty deed for the Turley Property, acknowledging the receipt of the property.

¶6.In 2020, Bill and his brother purchased another property in Kansas from Kenneth and Julia Thompson and Wayne and Glenda Thompson(Thompson Property) using money from a tax-free exchange of land combined with cash that came out of the VOM account.Bill testified that the cash from the VOM account used to acquire the Thompson Property was money he received as a distribution from Waterloo.He could not point to a specific Waterloo distribution, however, and he admitted on cross-examination that the funds were placed into the VOM account and that the check used to purchase the Thompson Property came from the VOM account, stating, "I put in distributions all along, and I don’t have any other accounts.I just put it in Valley of the Moon Farms.I thought it was the same as me."

¶7.After thirty years of marriage, the couple separated in 2021, and Kathy filed for divorce on the grounds of uncondoned adultery and, alternatively, habitual cruel and inhuman treatment and irreconcilable differences.Both Kathy and Bill stated that their interests had diverged and they had grown apart over the years.This divergence of interests is what Bill claimed led him to have an affair.Kathy sought an equitable division of the marital estate, permanent periodic alimony, lump sum alimony and for Bill to maintain her medical and dental insurance and his own life insurance for which she was the sole beneficiary.Kathy also requested reasonable attorneys’ fees.

¶8.On November 22, 2021, the chancery court entered an Agreed Temporary Order, which awarded Kathy temporary alimony in the amount of $7,610 per month, maintenance of her health insurance premiums and exclusive use and possession of the marital residence and its contents.The order also governed the operations of VOM and MPC.After the order was entered in November, Bill and his brother formed Moon Land Company, LLC(MLC), in December 2021.Bill and his brother exchanged their stock in Waterloo with their sister for title to Tract Two through MLC.In summary, Bill was left with a 50 percent interest in MLC—which owned Tract Two—and he no longer had an ownership interest in Waterloo.

¶9.A trial took place from June 29 to July 1, 2022.On February 8, 2023, the chancellor entered a final judgment of divorce and his findings of fact and conclusions of law.The chancellor granted the divorce on the ground of uncondoned adultery.Among other assets, the chancellor classified Tract Two and the Turley Property as Bill’s separate property, and classified the Thompson Property and the VOM account as marital property.In total, Bill’s separate property was valued at $5,341,640.14.After classifying and equitably dividing the various marital assets applying the Ferguson² factors, the chancellor considered Kathy’s alimony request weighing the Armstrong³ factors and awarded her permanent periodic alimony in the amount of $7,500 per month.In total, Kathy was awarded permanent periodic alimony and 40 percent of the marital estate, and the court ordered Bill to maintain life insurance for which Kathy was the sole beneficiary in the amount of $500,000 and to maintain Kathy’s health insurance until she turned sixty-five or was able to obtain Medicare.Kathy’s portion of the marital estate amounted to a lump sum payment of $667,557,⁴ whereas Bill’s portion of the marital estate was valued by the chancellor at $1,861,629.53.From this final judgment and findings of fact and conclusions of law, Kathy appeals.

ISSUES PRESENTED

¶10.Kathy raises two issues on appeal:

I.Whether Bill failed to rebut the marital property presumption for Tract Two and the Turley Property.

II.Whether the chancellor failed to consider and grant lump sum alimony.

STANDARD OF REVIEW

[1–4]¶11."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."Byrd v. Byrd, 100 So. 3d 443, 447(Miss.2012)(citingPearson v. Pearson,761 So. 2d 157, 162(Miss.2000))."The chancellor’s ruling will be upheld if supported by substantial credible evidence."Id.(citingCarrow v. Carrow,642 So. 2d 901, 904(Miss.1994))."Chancellors are afforded wide latitude in fashioning equitable remedies in domestic relations matters, and their decisions will not be reversed if the findings of fact are supported by substantial credible evidence in the record."Lewis v. Pagel,172 So. 3d 162, 172(Miss.2015)(internal quotation marks omitted)(quotingGutierrez v. Gutierrez,153 So. 3d 703, 707(Miss.2014)).As always, questions of law are reviewed de novo.Id.

DISCUSSION

I.Marital Property Presumption

[5–7]¶12."[T]here is generally a presumption that property acquired during the marriage is marital property."Yancey v. Yancey,752 So. 2d 1006, 1011(Miss.1999)(citingMastowski v. Mastowski,655 So. 2d 18, 20(Miss.1995))."Excluded from the definition of ‘marital assets’ are those attributable to one party’s separate estate prior to or outside the marriage."Byrd, 100 So. 3d at 447(citingCraft v. Craft, 825 So. 2d 605, 608(Miss.2002)).The spouse claiming that an asset acquired during the marriage is their separate property bears the burden of proof.Wheat v. Wheat,37 So. 3d 632, 640(Miss.2010)(citingA & L, Inc. v. Grantham,747 So. 2d 832, 839(Miss.1999))."This burden goes beyond a mere demonstration that the asset was acquired prior to marriage."Id.(citingGrantham,747 So. 2d at 839).Furthermore, actions of the spouses—such as the commingling of separate and marital property or the use of separate property for the benefit of the family—can change the character of an asset.Johnson v. Johnson,650 So. 2d 1281, 1286(Miss.1994);Stewart v. Stewart,864 So. 2d 934, 937(Miss.2003).

[8]¶13.When determining property division in a divorce action, "the chancellor must do three things: ‘(1) classify the parties’ assets as marital or separate, (2) value those assets, and (3) divide the marital assets equitably.’ "Burnham v. Burnham,185 So. 3d 358, 361(Miss.2015)(quotingWheat,37 So. 3d at 637).Kathy maintains that when classifying the parties’...