Dixon v. Dixon, 2940.

• Citation: 512 S.E.2d 539,334 S.C. 222
• Decision Date: 08 February 1999
• Docket Number: No. 2940.,2940.
• Court: South Carolina Court of Appeals
• Parties: Dorothy L. DIXON, Respondent-Appellant, v. Samuel L. "Teddy" DIXON, Appellant-Respondent.

334 S.C. 222

512 S.E.2d 539

Dorothy L. DIXON, Respondent-Appellant, v. Samuel L. "Teddy" DIXON, Appellant-Respondent.

No. 2940.

Court of Appeals of South Carolina.

Heard November 5, 1998.

Decided February 8, 1999.

Rehearing Denied March 27, 1999.

Douglas Kosta Kotti; and Ken H. Lester, of Lester & Jones, both of Columbia, for appellant-respondent.

Robert Rosen, of Rosen, Goodstein & Hagood; and Diane C. Current, of Nexsen, Pruet, Jacobs, Pollard & Robinson, both of Charleston, for respondent-appellant.

PER CURIAM:

Dorothy L. Dixon (the Wife) and Samuel Dixon (the Husband) both appeal from a family court order granting a divorce to the Wife on the ground of adultery, equitably distributing the marital estate, and awarding alimony to the Wife. We affirm as modified.

I. Background

The parties were married on September 18, 1952, when they were both eighteen years old. They have six children, all of whom are emancipated.

The Wife worked outside the home for only the first two months of the marriage. She has a high school education, but never obtained any further formal education or training. During the marriage, the Wife was responsible for cooking, cleaning, grocery shopping, and caring for the parties' children, all of whom were born during the first ten years of the marriage. The majority of household duties fell to the Wife, particularly given that the Husband was out of town a great deal during the first eight years of the marriage.

The Husband has a tenth-grade education and worked in the crane and rigging industry throughout the marriage. When the parties were first married, the Husband was employed with a company in Savannah, Georgia. In 1967, the parties moved to Charleston, South Carolina. In 1968, the Husband began working for Charleston Steel Erectors, eventually becoming vice-president.

In 1984, the Husband acquired the assets of Charleston Steel Erectors through a multi-million dollar lease-purchase transaction. Thereafter, the Husband's company was known as Crane & Rigging Services, Inc. (C & R). The Husband twice restructured the sale transaction, once in 1986 and again in 1989. According to the Husband's accountant, the second restructuring was done primarily to provide certain tax benefits to Charleston Steel. C & R was successful enough to allow the Husband to earn $100,000 per year income as reported on his income tax returns. The Husband also earned as much as $60,000 per year in additional unreported cash income, apparently earned through the sale of scrap metal.

The parties separated in October 1990, after the Husband confessed to the Wife that he was having an adulterous affair. In November 1990, the Wife instituted this action against the Husband. By order dated July 1, 1992, the family court granted the Wife a divorce on the ground of adultery and reserved all remaining issues for later determination.

In July 1991, C & R filed for bankruptcy, seeking to reorganize under Chapter 11 of the Bankruptcy Code. In April 1992, C & R filed an optimistic plan of reorganization. The disclosure statement filed with the plan stated that "prospects for a successful recovery appear very good. [C & R] provides a wide variety of work to its many customers. These customers ... have a need for the type of services [C & R] renders." However, in August 1992, just four months after filing its reorganization plan, C & R amended its bankruptcy pleadings to seek to liquidate its assets under Chapter 7 of the Bankruptcy Code. By December 1992, essentially all assets of C & R had been sold.

The final merits hearing in this action was held in April 1993. By order dated September 15, 1993, the family court awarded the Wife $1,000 per month in alimony, valued the marital estate at $634,207.82, and awarded 75% of the estate to the Wife and 25% to the Husband. When valuing the marital estate, the family court found that C & R had no value because it had been liquidated during the pendency of this action. Both parties filed post-trial motions seeking reconsideration of the final order. The family court issued its order on the motions to reconsider on February 26, 1996. While the court made certain amendments to the 1993 order, the amended order did not alter the equitable apportionment of the marital estate or the alimony awarded to the Wife.¹

II. Equitable Distribution

Both the Husband and the Wife appeal various aspects of the family court's equitable distribution award. The Wife's primary argument is that the family court erred by assigning no value to C & R in its valuation of the marital estate. The Husband's primary argument is that the family court erred by awarding the Wife 75% of the marital estate.

A.

The Wife argues that the family court erred by not including in the marital estate the value of C & R at the time the action was commenced. We agree.

Subject to certain exceptions, "marital property" includes "all real and personal property which has been acquired by the parties during the marriage and which is owned as of the date of filing or commencement of marital litigation." S.C.Code Ann. § 20-7-473 (Supp.1997). Thus, for purposes of equitable distribution, the value of marital property is the value of the property at the time of the commencement of the marital litigation. See Mallett v. Mallett, 323 S.C. 141, 151, 473 S.E.2d 804, 810 (Ct.App.1996)

("Marital property is valued as of the date of the filing of the complaint."), cert. denied (March 6, 1997); Jamar v. Jamar, 308 S.C. 265, 267, 417 S.E.2d 615, 616 (Ct.App.1992) ("The proper date to value marital property is the time the marital litigation is filed or commenced."). There is no dispute that C & R existed and was in operation in October 1990, when this action was commenced. Thus, at first blush, it seems clear that C & R's value as of October 1990 should have been included in the marital estate. The question, however, is whether the postfilling bankruptcy and ultimate liquidation of C & R change this conclusion.

It is an unfortunate reality that, given the volume of cases handled by our family courts, there often is a substantial delay between the commencement of an action and its ultimate resolution. Thus, it is not unusual for the value of marital assets to change, sometimes substantially, between the time the action was commenced and its final resolution. In such a case, the family court has the ability to consider the post-filing appreciation or depreciation when valuing and apportioning the marital estate. See McDavid v. McDavid, 333 S.C. 490, 497, n. 7, 511 S.E.2d 365, 369, n. 7 (1999)

("[B]oth parties may be entitled to share in any appreciation in marital assets which occurs after the parties separate but before the parties divorce.") (citing Smith v. Smith, 294 S.C. 194, 363 S.E.2d 404 (Ct.App.1987)); Mallett, 323 S.C. at 151,

473 S.E.2d at 810 (affirming valuation of husband's business as of time of final hearing where business had, through no fault of either party, declined in value by more than $30,000 since commencement of action; concluding "it would be grossly unfair to value this asset as of the date of the commencement of the action").

In this case, if the evidence had established that the decline of C & R was not the fault of either party, we might well have concluded that the family court did not abuse its discretion by assigning no value to C & R. In our view, however, the evidence clearly, if not overwhelmingly, establishes that the Husband set out to destroy C & R solely for the purpose of depriving the Wife of any interest in the company. See, e.g., Epperly v. Epperly, 312 S.C. 411, 414, 440 S.E.2d 884, 885 (1994)

("In an action on appeal from the Family Court, this Court has jurisdiction to find facts in accordance with its view of the preponderance of the evidence.").

Several witnesses testified that the Husband announced his intention to destroy his business. The parties' oldest daughter testified that on the day the Husband left the marital home, he assured her and her sisters that he would take care of and provide for the Wife. However, during a subsequent phone conversation, the Husband accused his daughter of advising the Wife to retain an attorney. The Husband told the daughter that "if [the Wife] messed with him, he would fix it so she wouldn't have a roof over her head." Another daughter testified that the Husband stated he was "going to get rid of everything. And if [the Wife] kept messing with him as far as getting attorneys, that he would bankrupt the company and there would be nothing left for [the Wife] to get." The Wife testified that her son warned her "that if [she] messed with the business that [the Husband] would file bankruptcy."

Even more compelling is the testimony of Dr. Robert Glenn, a close friend of the Husband. Glenn testified that in September 1990, just one month before this action was commenced, the Husband confided that he was contemplating a divorce from the Wife. Glenn told the Husband a divorce would be an unwise decision because the Wife might be awarded a large portion of C & R. According to Glenn, the Husband responded that "he would make it so there would be no assets" to divide, and would then "start over again."

From the record before us, it appears that during cross-examination of these witnesses, the Husband's attorney did not challenge whether the Husband in fact made these threats. Similarly, the Husband did not deny making the statements when he took the stand. We find this essentially unrebutted testimony to be very persuasive evidence of the Husband's plan to destroy C & R to prevent the Wife from receiving any portion of it. There is also ample evidence in the record establishing how the Husband carried out this plan.

Dr. Glenn testified that the Husband began working less and less in 1991 and 1992, after the commencement of this action. According to Glenn, the Husband was frequently away from his office during the week. Similarly, Charlton...