Cleveland v. Cleveland, 90-CA-0995

• Decision Date: 13 May 1992
• Docket Number: No. 90-CA-0995,90-CA-0995
• Parties: Beatrice R. CLEVELAND v. Lance E. CLEVELAND.
• Court: Mississippi Supreme Court

Page 193

600 So.2d 193

Beatrice R. CLEVELAND v. Lance E. CLEVELAND.

No. 90-CA-0995.

Supreme Court of Mississippi.

May 13, 1992.

Thomas Wright Teel, Clare S. Hornsby, Sekul Hornsby Teel & Tisdale, Biloxi, for appellant.

Patricia C. Champagne, Gulfport, for appellee.

Before HAWKINS, P.J., and PRATHER and ROBERTSON, JJ.

HAWKINS, Presiding Justice, for the Court:

Beatrice Cleveland was granted a divorce from Lance Cleveland in the Harrison County Chancery Court on the ground of habitual cruel and inhuman treatment. She has appealed the chancery court judgment of a cash award of $50,000 lump sum alimony and $600 a month periodic alimony for seven years. Lance has cross-appealed alleging that the lump sum alimony and the periodic alimony were excessive.

We reverse and remand as to the lump sum alimony, and reverse and increase the monthly periodic alimony to $1,000 with no set termination date.

FACTS

Lance and Beatrice Cleveland married May 27, 1982. He was the sole owner of Coastal Chiropractic Clinic in Long Beach with one full-time and one part-time employee. Beatrice was working for the clinic when they married.

Beatrice lived in a house on Beatline Road in Long Beach, which became the administrative office for Coastal Chiropractics. When Lance moved in with Beatrice he had no furniture, but he did assume the house mortgage payments that Beatrice's former husband had been paying.

Lance was in poor financial shape in 1982. He had filed for Chapter 7 bankruptcy in 1981, affecting his ability to obtain financing. His 1979 station wagon had over 100,000 miles. By 1984, however, he was able to refinance the mortgage on the Beatline Road house and in the process changed title to the house to give him co-ownership with Beatrice.

Lance's father prepared a financial statement for Lance which listed property Lance owned in May, 1982, the larger items being:

Asset Value Liability

Silver Run Lake ............. $ 12,000 .. $ 6,000

1981 Cessna airplane ........ $ 75,000 .. $51,000

1979 Chevrolet station wagon $ 12,000 .. $ 6,000

Chiropractic Equip........... $ 40,000 .. $20,000

-------- ---------

TOTAL $139,000 $83,000

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In determining his assets in 1982, Lance listed these items in the estimation of his net worth, but failed to depreciate them. Lance's statement of net worth indicated assets of $146,000 and liabilities of $83,000, creating a stated net worth of $63,000 at the time of marriage. Also, Lance did not include a $20,000 student loan which was only partially paid off when they married.

Lance's chiropractic practice began to flourish following their marriage. Lance incorporated his clinics as Coastal Chiropractic in 1986, and made Beatrice vice-president. She thought that she was half owner of the corporation prior to the separation, but no corporate shares were ever issued to her. After they separated he removed Beatrice as vice-president.

Before Beatrice married Lance, she was responsible for bulletins, mailouts, television advertising and some radio advertising for Coastal Chiropractic, and at Lance's request continued working in the same capacity after they married.

Beatrice had no high school diploma, GED or a college degree. Prior to working at Coastal Chiropractic, Beatrice was a housewife and held brief employment as a waitress, sales person and cashier. She had scoliosis of the spine, which caused dizziness, fainting spells, headaches and sometimes the temporary loss of the use of her right arm.

Lance's income tax records track the growth of his business and income:

Gross Business Income Salary Adjusted Gross

Income

1984 --- $139,675 ------- $59,059 -- ?

1985 --- $141,889 ------- $44,825 -- ?

1986 --- $244,824 ------- $62,257 -- $35,956

1987 --- $339,183 ------- $162,548 -- $145,212

1988 --- $885,944 ------- $108,860 -- $105,690 In May, 1989, the Coastal Chiropractic Clinics--there were two at the time--billed out $115,396 and had receivables of $58,989. From June, 1988, to May, 1989, Coastal Chiropractic billing ranged from a high of $186,822 in November, 1988, to a low of $77,413 in June, 1988. The receivables varied from a low of $26,946 in June, 1988, to a high of $81,876 in December, 1988. In 1989, the average collections were $70,000, payroll was $40,000 a month and federal withholding was $10,000 a month. The loans and lease on the business equipment were $10,000 a month and rent was $5,000 a month.

Coastal Chiropractic had twenty-three employees with four doctors and locations in Long Beach, Biloxi and Waveland in April, 1990. Lance was considering expansion with two more clinics on the coast and then moving into the Jackson area.

In addition to his $108,860 salary, Lance's business provided him with a Mercedes, paid his car insurance, license tag, gas, maintenance and car phone expense. The business also paid for Lance and Beatrice's medical insurance plus medical expenses not covered by insurance, the premium for a $100,000 life insurance policy required by Hancock Bank to collateralize a loan and disability insurance.

The Beatline Road house, where the Clevelands lived until July, 1987, served as the administrative office for the business beginning in July, 1988. Coastal Chiropractic paid $1,200 a month rent, the phone bill and utilities for using the house as the administrative office. Lance lived there following their separation. The rent of $1,000 was paid into an annuity for Lance with Jackson National, while the other $200 was used to pay for the house's taxes, insurance and maintenance.

Lance's itemization of monthly living expenses on March 1, 1990, was $11,259. This statement, which was also prepared by his father, listed among other items, the mortgage payment--$1,450--for the home/administrative office on Beatline Road in Long Beach. The business paid $1,200 of this as rent. Beatrice disputed the listed Harbor View condominium mortgage payment of $1,657, and a monthly breakdown of payment signed by Lance indicated that the total payment was $1,052. Lance had a monthly promissory note payment of $275.60 and not $560 as listed on his expense statement. Furthermore, he listed $1,500 as an expense to be paid for a pension, but admitted that this payment was not made in March and one had not been made since the business was incorporated in 1986. Lance also listed as personal expenses telephone expenses, utilities, health care insurance, car insurance, car registration, which were all paid by the business.

According to Lance's personal financial statement as of May 17, 1989, before he and Beatrice separated, his total assets were $329,600 and his net worth was $227,800. He also produced a personal financial statement dated April 5, 1990, indicating his assets were $234,950 and his net worth was $10,850. In the April 5, 1990, statement Lance failed to list as an asset an investment of $27,700 in Coastal Chiropractic. He also gave the value of the Beatline Road home as $84,000 in the May 17, 1989, statement and $65,300 on April 5, 1990. Interest in a timeshare condominium in Florida, jointly owned by Lance and Beatrice, was listed at $14,000 in the 1989 statement and $12,250 in 1990. Lance further valued his personal belongings in 1989 at $28,000 and 1990 at $5,000.

Lance and Beatrice bought the Mockingbird Lane house they owned as joint tenants for $240,000 with a down payment of $24,000 borrowed from the bank. In April or May, 1989, the house was sold for $265,000 with selling costs of $17,425. Beatrice testified a $47,000 profit was made when the house was sold, which she never saw. Lance denied any profit was made in the house sale, but coincidentally his May 17, 1989, personal financial statement listed $47,000 in cash at Hancock Bank as an asset.

After selling the Mockingbird Lane house, Lance borrowed in his name $95,000 for the purchase of the Harbor View condominium Lance explained that the $35,000 in escrow was to be used expressly to furnish the condominium--buy draperies, carpet, furniture, beds, dressers, etc. The escrow money could only be withdrawn with Lance and Jerry Rosetti's approval. Rosetti was an attorney for the mortgage company holding Lance's note. The separation occurred shortly after the condominium was purchased, and Lance never used the escrow money to furnish the condominium.

and placed $35,000 in an escrow account for improvements. According to Lance, the net purchasing price of the condominium was $122,121.21, which included the earnest money, down payment and buyer's cost of $27,121.21. Beatrice said that the condominium was sold to them for $85,000, but the note is in the amount of $95,000. Lance and Beatrice jointly owned the condominium.

Some time after the separation in the fall of 1989, Beatrice--knowing about the escrow--withdrew $25,000 from the account at Bank of Mississippi in addition to $8,500 or $9,000 from a joint checking account, one-half of the account. This was done without the approval of Lance or Rosetti. The Bank of Mississippi sued her and a judgment was entered against Beatrice for $25,000. This matter was resolved by the chancellor in the divorce decree.

As of April 4, 1990, Beatrice had only $3,000 of the $33,500-$34,000 left. The money had been expended for living expenses. Lance paid her nothing following their separation. Lance also took Beatrice's Cadillac automobile from her. Lance continued, however, to pay the mortgage and the utilities at the Harbor View condominium where Beatrice lived.

Beatrice had no source of income after the separation. Her monthly living expenses were estimated to be $3,100 a month. This included $1,200 in condominium costs and $300 for car maintenance.

Beatrice and Lance Cleveland separated on June 13, 1989. She initially filed for separate maintenance. Lance filed a counterclaim for a divorce on June 26, 1989. Beatrice amended her original complaint and filed a complaint for divorce on April 4, 1990.

In his decree the Chancellor awarded Beatrice $50,000...