Cuda v. Cuda, WD

• Decision Date: 25 July 1995
• Docket Number: No. WD,WD
• Citation: 906 S.W.2d 757
• Parties: Suzette M. CUDA, Respondent, v. Frank A. CUDA, Appellant. 50001.
• Court: Missouri Court of Appeals

Page 757

906 S.W.2d 757

Suzette M. CUDA, Respondent, v. Frank A. CUDA, Appellant.

No. WD 50001.

Missouri Court of Appeals Western District.

July 25, 1995.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Aug. 29, 1995.

Application to Transfer Denied

Oct. 24, 1995.

J.C. Hambrick, Jr., Kansas City, for appellant.

Deborah D. Conklin, Gladstone, for respondent.

Before KENNEDY, P.J., and SMART and LAURA DENVIR STITH, JJ.

KENNEDY, Presiding Judge.

Wife and Husband were married July 20, 1988. Wife filed suit for dissolution of the marriage September 10, 1992, and the decree was granted August 9, 1994. They have two children, the first born July 25, 1988, and the second born April 7, 1990.

While they were living together before their marriage, a period of four or five years, they purchased a residence. They took title in their joint names. The down payment of $13,150 was paid by Husband from separate funds, although Wife contributed to the closing costs from her funds. They were still living in this house at the time of the separation. The court found the value of the house to be $132,500; it was subject to a mortgage of $88,050.96. The house was adjudged to be marital property and it was awarded to Wife.

The husband's complaint on appeal is that the court "failed to recognize" husband's "separate contribution" to the purchase of the house.

We have concluded that the trial court was not in error to treat the house as marital property. It is true, as husband points out, there was no evidence that the house was purchased "in contemplation of marriage." Citing Colborn v. Colborn, 811 S.W.2d 831, 834 (Mo.App.S.D.1991), husband argues that property acquired by co-habiting parties becomes marital property only if it was acquired in "contemplation of marriage." Here, although husband made the $13,150 down payment from separate funds, the title to the property was taken in their joint names. Wife thus succeeded to an equal joint interest with husband by gift. Tracy v. Tracy, 791 S.W.2d 924, 927-28 (Mo.App.S.D.1990); In re Marriage of Smith, 785 S.W.2d 764 (Mo.App.E.D.1990). Wife and husband together signed the promissory note for the balance of the purchase price. Wife's contributions contributed to pay the monthly mortgage payments from that time until the marriage and, after the marriage till the divorce, and assisted in the maintenance and the improvement of the house throughout that time.

Before the marriage, the house was simply joint tenancy property. When they married, the joint tenancy property took on the additional character of marital property.

In the Colborn case, relied upon by husband, there was no evidence that the husband, during the period of pre-marital cohabitation, ever recognized the wife as equal co-owner with him of the disputed property--and, in fact, specifically rejected any claim by wife upon the disputed property (a partnership interest in a dairy operation). That is a far cry from the present case, where the husband expressly bestowed upon the wife a joint tenancy interest in the real estate acquired before marriage. See Tracy, 791 S.W.2d at 927. The evidence also indicates that the relationship was intended by the parties to be a counterfeit of marriage, in the melding of their financial affairs and the sharing of responsibilities and resources. In Colborn, on the other hand, the parties seemed to maintain a wall of separation between their respective resources.

We see no error in the trial court's calling the house marital property. Husband does not complain of the decree's awarding the house to the wife if it is to be considered marital property.

2. During the co-habitation and the ensuing marriage of the parties, they bought a substantial amount of personal property, including furniture and furnishings for the house. Husband complains that the court did not recognize his own non-marital funds which went into these purchases, but designated it all as marital property. However, wife maintained that her funds contributed substantially to the acquisition of the property, and they acquired them, and treated them, as communal property. Where the parties continually commingle marital assets and earnings, and treat property as communal, separate property may be transmuted into marital property. Feinstein v. Feinstein, 778 S.W.2d 253, 261 (Mo.App.E.D.1989). Non-marital property may lose its character as such if there is evidence of an intent to contribute the property to the community, True v. True, 762 S.W.2d 489, 492-93 (Mo.App.W.D.1988).

3. Husband complains of the court's designation of his stock in a corporation named Cuda & Chambers, Inc., as marital property.

Cuda & Chambers, Inc., owned and operated a restaurant named Donovan's Sports Cafe. Husband owned 50 percent of the stock in the corporation. His parents owned the other 50 percent. The business started in 1984.

Husband had this stock before his marriage to wife, and before even his cohabitation with wife. Wife had no connection with the business, other than to work there as a cocktail waitress and manager from time to time and some periodic work done from their home. For this work she usually received wages.

The trial court held that husband's 50 percent interest in the corporation was marital property, and that husband's interest had a value of $50,000.

Husband complains of the court's marital property designation of his interest in the corporation. The stock was awarded to husband at a value of $50,000.

Wife's justification for the marital property designation is that Husband's stock increased in value during the marriage from zero to $50,000. At the time of the marriage (July 20, 1988) the business was in Chapter 11 reorganization and therefore, as she argues and as the court implicitly found, worth nothing. She argues that the entire value of Husband's stock became marital property.

The seminal case of Hoffmann v. Hoffmann, 676 S.W.2d 817 (Mo. banc 1984), has much to teach us about this case. Hoffmann recognizes the principle that marital labor and marital funds may enhance the value of property acquired by one spouse before the marriage, and that, to the extent that the marital labor and marital funds contribute to the increase in value, it becomes marital property.

The same deficiencies in the wife's proof in Hoffmann defeat wife's claim in this case that the husband's stock in Cuda & Chambers, Inc., became marital property in the present case. Husband was paid a salary for his services to the corporation. "The wife has failed by any proof to establish the value of the husband's services to the corporation or that he had indeed sacrificed payment of marital funds, by way of salary or dividends in order...