Conrad v. Conrad

• Decision Date: 10 February 2005
• Docket Number: No. 31747.,No. 31748.,31747.,31748.
• Citation: 216 W.Va. 696,612 S.E.2d 772
• Court: West Virginia Supreme Court
• Parties: Jeanette Sue CONRAD, Petitioner Below, Appellant v. Delmer Wayne CONRAD, Respondent Below, Appellee. and Jeanette Sue Conrad, Petitioner Below, Appellee v. Delmer Wayne Conrad, Respondent Below, Appellant.

Page 772

612 S.E.2d 772

216 W.Va. 696

Jeanette Sue CONRAD, Petitioner Below, Appellant v. Delmer Wayne CONRAD, Respondent Below, Appellee. and Jeanette Sue Conrad, Petitioner Below, Appellee v. Delmer Wayne Conrad, Respondent Below, Appellant.

No. 31747.

No. 31748.

Supreme Court of Appeals of West Virginia.

Submitted January 12, 2005.

Decided February 10, 2005.

John G. Ours, Petersburg, West Virginia, Attorney for Jeanette Sue Conrad.

James Wilson Douglas, Sutton, West Virginia, Attorney for Delmer Wayne Conrad.

PER CURIAM:

Jeanette Sue Conrad and Delmer Wayne Conrad have filed separate appeals from a decision of the Circuit Court of Grant County granting a divorce to the parties and deciding various issues of equitable distribution, alimony, and attorney fees. Upon thorough review of the assertions of both parties, the record, and the applicable precedent, we reverse the decision of the lower court and remand with instructions.

I. Factual and Procedural History

Jeanette and Delmer Conrad were married on April 7, 1962. They separated in December 2000, and the final divorce order was entered by the Circuit Court of Grant County in December 2003. In determining issues of equitable distribution, the lower court held that benefits payable on a long term disability policy purchased with marital proceeds was the separate property of Mr. Conrad. Premiums on this policy had been deducted from Mr. Conrad's monthly salary from 1965 through 1993 at the rate of $40.00 monthly.¹

In the final divorce order, the lower court also found that an annuity and a retirement account constituted marital property and divided those holdings equally between the parties, as valued at the date of divorce. On appeal, Mrs. Conrad contends that the annuity and retirement accounts should have been valued at the time of separation, rather than being assigned a value three years later at the time of the final divorce order. Further, she contends that she is entitled to one-half of the proceeds from those accounts received by Mr. Conrad from the date of separation to the date of divorce.

During the parties' separation, a temporary order had required Mr. Conrad to pay the mortgage on the family home of $680.00 monthly, in addition to $350.00 monthly in temporary alimony. When Family Court Judge Timothy Prentice entered an "Order Confirming Sale" of the marital home on December 19, 2002, he found that Mr. Conrad should be given credit for those payments of marital debt in the calculation of the equitable distribution. However, in the final divorce order, entered by Family Court Judge Jaymie Godwin Wilfong, Mr. Conrad was not given credit for payment of expenses related to the marital home. The lower court affirmed the order entered by Family Court Judge Wilfong, and Mr. Conrad asserts on appeal that he should have been permitted to offset payments of marital debt, such as mortgage payments, against any final equitable distribution award. He also asserts that he should have been permitted to receive credit for payment of an additional $27,523.08 in marital credit card debt and other marital obligations.

The final divorce order awarded Mrs. Conrad alimony of $750.00 monthly. On appeal, she contends that such award is insufficient. However, Mr. Conrad contends that such award is excessive, based upon his allegation that he will be forced to use the proceeds of his long term disability policy to pay the alimony and that he receives only approximately $2,900.00 monthly from the combination of the long term disability payment, social security, the annuity, and his retirement income.

Additionally, Mrs. Conrad contends on appeal that Mr. Conrad received a repayment of a $2,100.00 loan to the parties' daughter. Mrs. Conrad claims entitlement to one-half of that amount. Mrs. Conrad also contends that she should receive $8,000.00 in attorney fees due to the disparity in financial resources between the parties.

II. Standard of Review

In syllabus point two of Lucas v. Lucas, 215 W.Va. 1, 592 S.E.2d 646 (2003), this Court held as follows:

In reviewing challenges to findings made by a family court judge that also were adopted by a circuit court, a three-pronged standard of review is applied. Under these circumstances, a final equitable distribution order is reviewed under an abuse of discretion standard; the underlying factual findings are reviewed under a clearly erroneous standard; and questions of law and statutory interpretations are subject to a de novo review.

Further, in syllabus point one of Banker v. Banker, 196 W.Va. 535, 474 S.E.2d 465 (1996), this Court explained as follows: "`A circuit court should review findings of fact made by a family law master only under a clearly erroneous standard, and it should review the application of law to the facts under an abuse of discretion standard.' Syllabus Point 1, Stephen L.H. v. Sherry L.H., 195 W.Va. 384, 465 S.E.2d 841 (1995)." In the syllabus of Nichols v. Nichols, 160 W.Va. 514, 236 S.E.2d 36 (1977), this Court stated: "Questions relating to alimony and to the maintenance and custody of the children are within the sound discretion of the court and its action with respect to such matters will not be disturbed on appeal unless it clearly appears that such discretion has been abused."

III. Discussion

A. Long Term Disability Benefits

This Court is presented with the question of whether long term disability benefits based upon the disability of one spouse are separate or marital property. The lower court ruled that such benefits should be treated as separate property belonging to the disabled spouse. As Mrs. Conrad emphasizes in the case sub judice, however, the premiums to purchase such policy, in the amount of $40.00 monthly for almost thirty years, were paid from marital funds. Mrs. Conrad therefore contends that the benefits derived from such purchase should be shared equally by the divorcing spouses.

West Virginia Code § 48-1-233 (2001) (Repl.Vol.2004) defines marital property, in pertinent part, as follows:

(1) All property and earnings acquired by either spouse during a marriage, including every valuable right and interest, corporeal or incorporeal, tangible or intangible, real or personal, regardless of the form of ownership, whether legal or beneficial, whether individually held, held in trust by a third party, or whether held by the parties to the marriage in some form of co-ownership such as joint tenancy or tenancy in common, joint tenancy with the right of survivorship, or any other form of shared ownership recognized in other jurisdictions without this state, except that marital property does not include separate property as defined in section 1-238 [§ 48-1-238]; and

(2) The amount of any increase in value in the separate property of either of the parties to a marriage, which increase results from: (A) an expenditure of funds which are marital property, including an expenditure of such funds which reduces indebtedness against separate property, extinguishes liens, or otherwise increases the net value of separate property; or (B) work performed by either or both of the parties during the marriage.

West Virginia Code § 48-7-101 (2001) (Repl.Vol.2004) provides for equal division of marital property, as follows: "Except as otherwise provided in this section, upon every judgment of annulment, divorce or separation, the court shall divide the marital property of the parties equally between the parties."

In syllabus point three of Whiting v. Whiting, 183 W.Va. 451, 396 S.E.2d 413 (1990), this Court stated as follows:

W.Va.Code, 48-2-1(e)(1) (1986),² defining all property acquired during the marriage as marital property except for certain limited categories of property which are considered separate or nonmarital, expresses a marked preference for characterizing the property of the parties to a divorce action as marital property.

In accord, Syl. Pt. 1, Koontz v. Koontz, 183 W.Va. 477, 396 S.E.2d 439 (1990).

In Huber v. Huber, 200 W.Va. 446, 490 S.E.2d 48 (1997), this Court again recognized the legislative preference for classification as marital property and noted limited exceptions as follows:

In spite of the legislative preference for classifying property as marital, this Court has found some exceptions to the preference. One such exception is personal injury awards. This Court articulated in syllabus point 1 of Hardy v. Hardy, 186 W.Va. 496, 413 S.E.2d 151 (1991) that, "[t]o the extent that its purpose is to compensate an individual for pain, suffering, disability disfigurement, or other debilitation of the mind or body, a personal injury award constitutes the separate nonmarital property of an injured spouse." However, we also held that "economic losses, such as past wages and medical expenses, which diminish the marital estate are distributable as marital property when recovered in a personal injury award or settlement." Id., 186 W.Va. at 501, 413 S.E.2d at 156. Additionally we stated in syllabus point 4 of Hardy that "[a] loss of consortium claim is the separate nonmarital property of the uninjured spouse."

200 W.Va. at 451, 490 S.E.2d at 53.

While this Court has not addressed distribution of proceeds from a long term disability policy which began paying benefits prior to the parties' separation, the issue of distribution of the proceeds from a long term disability policy has been extensively analyzed by courts of other jurisdictions. Many states have held that disability benefits are to be considered marital property unless a statutory provision specifically excludes such benefits from the marital estate. See Mason v. Mason, 319 Ark. 722, 895 S.W.2d 513 (1995) (holding that husband's employment disability benefits were marital property because they did not fall within the statutory exemption for personal injury benefits); In re Marriage of Simon, 856 P.2d 47 (Colo.App.1993) (holding that disability benefits from private disability insurance policy purchased with...