Craft v. Craft, No. 2000-CA-02101-SCT.

• Decision Date: 06 June 2002
• Docket Number: No. 2000-CA-02101-SCT.
• Citation: Craft v. Craft, 825 So.2d 605 (Miss. 2002)
• Parties: Lorraine C. CRAFT v. Jay Douglas CRAFT.
• Court: Mississippi Supreme Court

825 So.2d 605

Lorraine C. CRAFT v.Jay Douglas CRAFT.

No. 2000-CA-02101-SCT.

Supreme Court of Mississippi.

June 6, 2002.

Rehearing Denied September 19, 2002.

William R. Wright, W. Benton Gregg, Jackson, Deborah H. Bell, University, Attorneys for Appellant.

David Alan Pumford, Jackson, Erik M. Lowrey, Robert R. Marshall, Hattiesburg, Attorneys for Appellee.

Before McRAE, P.J., DIAZ and CARLSON, JJ.

DIAZ, J., for the Court.

¶ 1.On February 19, 1999, Lorraine C. Craft filed for divorce against Jay Douglas Craft on the ground of irreconcilable differences.Lorraine amended her complaint on April 12, 2000, and alleged that Jay committed adultery with her best friend.In his answer, filed on June 19, 2000, Jay admitted to both grounds for divorce.The matter was heard before the Chancery Court of Lamar County, Mississippi on August 29, 2000.The chancellor issued his Memorandum Opinion on November 7, 2000, and entered his Final Judgment of Divorce on December 18, 2000.The chancery court granted a divorce to Lorraine on the ground of adultery.Lorraine appeals the property distribution, contending that the chancellor erred in classifying Jay's partnership with his brother as non-marital property.

FACTS

¶ 2.Lorraine and Jay were married for about 12 years.The couple had no children together, although Jay has a son, Matthew, who lived with Jay and Lorraine from the age of five.It was undisputed that Lorraine contributed significantly to Matthew's upbringing.Lorraine's niece testified that Lorraine did a lot of the cooking and helped Matthew with his homework.She also testified that Jay did some cooking.

¶ 3.In 1979 Jay and his brother, Brad Craft, entered into a partnership to operate a used car business in Hattiesburg, Mississippi under the name of Craft Auto Sales.This partnership existed prior to Lorraine and Jay's marriage on May 30, 1987.Although Brad and Jay did not formalize the partnership until 1994, the brothers have filed tax returns as a partnership since 1980.The partnership agreement also provided for a $500,000 life insurance policy on the life of each partner with the beneficiary being the surviving brother.The proceeds would be paid to the decedent's estate which would effect a transfer of the total interest in the partnership to the surviving partner.Sometime after the marriage, Brad and Jay started acquiring real estate properties with some of the earnings from the dealership.This real estate was considered an asset of the partnership.Craft Auto Sales paid the property taxes.All of the property was acquired equally by Brad and Jay as joint tenants or tenants-in-common.

¶ 4.The value of the dealership and of the real estate investments increased during Jay and Lorraine's marriage.The real estate holdings grew to a value of $2,000,000.Jay's interest in the partnership was valued at approximately $1.16 million, according to Lorraine's expert, $850,000 according to Jay's expert, and $750,000 according to Jay himself as owner of half of the interest of Craft Auto Sales.

¶ 5.Both Lorraine and Jay were employed throughout their marriage.In 1996 Lorraine was a loan officer for UC Lending where her income was about $33,000 per year.She was promoted to office manager, and her income increased in 1998 to about $64,500 per year, not including "large bonuses"she received up until May of 1999, a company car, fully paid health insurance, and an allowance on company credit cards.Lorraine testified that she changed jobs in May of 1999 due to the stress of the divorce.She now works for a different loan institution.Her current base salary is $44,000 per year.Jay's income is approximately $128,000 per year.In the years that Lorraine and Jay lived together, they had combined earnings of $850,800, with Jay contributing approximately $588,000 and Lorraine contributing approximately $262,700.These figures were undisputed.The chancellor found that Lorraine was in good health, had no children, and was capable of earning an income of $65,000 to $75,000 a year.

¶ 6.Of the marital assets, Lorraine was awarded the marital home, valued at $225,000, subject to the mortgage, but with equity of $94,000.Sometime after Jay and Lorraine separated, she withdrew $80,000 cash from the marital funds.She used $30,000 of the withdrawn funds to purchase a 1999 Mazda automobile.She was awarded the automobile, as well as the $80,000 she had withdrawn.She was also awarded a $15,000 retirement account.She was awarded $7,000 to contribute to her attorney's fees.Furthermore, after the separation, and when Jay moved out, on or about February 5, 1999, Jay voluntarily paid Lorraine $500 per week, plus $50 per month for her cellular phone and $50-70 per week for the maid service.He continued the voluntary payments until April, after which time the chancery court ordered Jay to continue with the payments.Jay made the payments on a timely basis throughout the separation.

¶ 7.Of the remaining marital assets, which were classified as Jay's non-marital property according to the exhibit, Jay was left with a little over $10,000, not including a stock account valued at $35,000 which he purchased in March of 2000, after the marital estate was settled.As for Loraine's non-marital assets, she has a one-third future interest in her father's life estate in Lamar County, which consists of 129 acres.This asset was not included on her list of financial assets submitted to the chancery court.Also relevant to the division of marital assets, the chancery court established that Jay sustained net gambling losses of approximately $67,000 over a three to four year period.

¶ 8.As for Lorraine's contention that Jay's half of Craft Auto Sales should be classified as marital, Lorraine testified that, during the early years of their marriage, when Jay and Brad would rotate Saturdays running the business, she helped Jay with some general clerical work for the partnership on his Saturday rotation.She also stated that she was involved with the business when she once helped Jay to audit Regal Financial Services, a lending company started by Jay, Brad, and two other partners.She testified that she encouraged Jay and Brad to invest in real estate.Jay's testimony, on the other hand, was that Lorraine did not do any work for Craft Auto Sales and that when she was there, she"just mainly hung around" and that she had not been there on a Saturday at all for the past 7 to 8 years.

¶ 9.At trial, Loraine requested $504,153.29 in lump sum alimony or real estate and $3000 per month in permanent periodic alimony.The chancery court classified Jay's interest in the partnership as a non-marital asset.The court equitably distributed the marital assets and awarded Lorraine $175,000 in lump sum alimony, as well as periodic alimony in the amount of $2000 per month for twenty-four months.The chancellor determined that when dividing the marital assets, which totaled slightly less than $350,000, there remained a marked deficit on the part of Lorraine.Therefore, the chancellor awarded the lump sum and periodic alimony as an adjunct to the equitable distribution of the marital estate.The primary contention on appeal is the division and classification of assets.Jay's interest in the partnership and in the real estate was not included in the marital assets.Lorraine contends that those assets should have been classified as marital.The following issues are now before this Court:

I.Whether the court erred in determining the ownership and classification of assets.

II.Whether the court erred in not awarding Lorraine an interest in the business and real estate assets.

III.Whether the court erred in finding Lorraine had not contributed to the appreciated value of the assets.

IV.Whether the court erred in finding that Jay's brother would have to be joined before equitable distribution of the marital assets.

V.Whether the court erred in failing to grant Lorraine permanent or long-term periodic rehabilitative alimony.

DISCUSSION

¶ 10.This Court's scope of review in domestic relations matters is limited.Montgomery v. Montgomery,759 So.2d 1238, 1240(Miss.2000).Absent an abuse of discretion, this Court will uphold the decision of the chancellor.Hollon v. Hollon,784 So.2d 943, 946(Miss.2001).This Court will not disturb the findings of a chancellor unless the chancellor was manifestly wrong, clearly erroneous or an erroneous legal standard was applied.Henderson v. Henderson,757 So.2d 285, 289(Miss.2000).

I.WHETHER THE COURT ERRED IN DETERMINING THE OWNERSHIP AND CLASSIFICATION OF ASSETS.

¶ 11.According to this Court's ruling in Johnson v. Johnson,650 So.2d 1281, 1287(Miss.1994), the first step before division of the assets is for the chancellor to characterize the parties' assets as marital or non-marital.This Court also ruled, in Hemsley v. Hemsley,639 So.2d 909, 915(Miss.1994), that assets accumulated during the marriage are marital assets and are subject to equitable division unless it can be proven that such assets are attributable to one of the parties' separate estates either prior to the marriage or outside of the marriage.The second step is for the chancellor to equitably divide the marital property according to the guidelines set forth in Ferguson v. Ferguson,639 So.2d 921, 928(Miss.1994).In Johnson,this Court stated that "[i]f there are sufficient marital assets which, when equitably divided and considered with each spouse's marital assets, will adequately provide for both parties, no more need be done."Johnson,650 So.2d at 1287.Where there is a deficit left for one of the parties, "then alimony based on the value of non-marital property should be considered."Id.Lorraine does not dispute the division of the stipulated marital property.She does, however, dispute the chancellor's finding that Jay's one-half interest in Craft Auto Sales is not marital property.

¶ 12.Lorraine contends that she is...